Logo of Phnom Penh Post newspaper Phnom Penh Post - FDI to Cambodia rockets 12% to $3.5 billion in 2019

FDI to Cambodia rockets 12% to $3.5 billion in 2019

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Total foreign direct investment (FDI) to the Kingdom amounted to $3.588 billion, up 11.7 per cent from $3.212 billion last year. Heng Chivoan

FDI to Cambodia rockets 12% to $3.5 billion in 2019

Cambodia attracted more than $3.5 billion in foreign direct investment (FDI) last year, an increase of nearly 12 per cent over 2018, thanks in part to Chinese investors who accounted for half of the investments, a National Bank of Cambodia (NBC) report released last week showed.

According to the Macroeconomic and Banking Progress 2019 Report and 2020 Outlook, total FDI amounted to $3.588 billion, up 11.7 per cent from $3.212 billion last year.

Of the total, the financial sector received FDI worth $2.385 billion, while the non-financial sector received $1.203 billion.

“Cambodia is experiencing a steady increase in FDI at this time because of sound environmental and investment laws.

“Investors are confident [in the prospect of] decent profitability upon investing in Cambodia,” Supreme National Economic Council senior adviser Mey Kalyan told The Post on Saturday.

He said FDIs were vital for the Kingdom to continue experiencing sustained growth since they generated jobs and increased export potential, but warned that the Kingdom should be wary of accepting too many investments from any single region or country.

A breakdown of the data by country showed that Chinese FDIs accounted for 43 per cent, South Korean (11 per cent), Vietnamese (seven per cent), Japanese and Singaporean (six per cent), and other countries (27 per cent).

“To avert risk, it would be a positive step if countries invested capital at the same level so that we are not dominated,” Kalyan said.

Cambodian Chamber of Commerce (CCC) vice-president Lim Heng credited favourable investment laws for the Kingdom’s rise as an attractive destination for foreign investors.

“Last year, the CCC met with a lot of foreign investors who expressed interest in investing in Cambodia.

“I anticipate Cambodia to generate additional FDI as it negotiates a free trade agreement with China,” he said.

Cambodian Valuers and Estate Agents Association president Chrek Soknim told The Post that a large influx of Chinese investors boosted the real estate and construction sectors.

“Foreign capital investment in Cambodia will continue to see high growth in 2020,” he predicted.

The NBC report showed the Kingdom’s economic growth to have reached 7.1 per cent last year, with an inflationary rate of approximately 1.9 per cent. It also forecasts economic growth to be at seven per cent with an inflation rate of some 2.3 per cent this year.

Meanwhile, FDI will grow by 10 per cent to reach a total value of $3.951 billion in 2020, the NBC said.

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