WB: Cambodia’s Economy Performed Well Better Than Expected

The World Bank has issued a report highlighting the good performance of Cambodian economy and predicted it to grow at 7 percent in 2019.

Growth achieved a four-year high of 7.5 percent in 2018, compared to 7.0 percent in 2017. Driven primarily by garment and footwear exports that responded to strengthening demand in the U.S., the economy performed better than expected, said the April 2019 edition of the World Bank East Asia and Pacific Economic Update released yesterday.

Given solid export growth in low-skilled manufacturing products, continued poverty reduction is expected, added the report, stressing however that risks have intensified due to heightened uncertainty over preferential access by Cambodia to EU markets under the EBA scheme and a potential sharp slowdown in the Chinese economy.

As exports moderate in line with deceleration in global demand, real growth is projected to ease to 7 percent in 2019, and slow down a little bit to 6.9 in 2020 and 6.8 in 2021, it continued.

According to the report, the longer-term outlook depends on the country’s ability to absorb rising Foreign Direct Investment (FDI) inflows, while promoting domestic investment. In this regard, cheaper energy and logistics costs, availability of skilled workforce, and improved supply chain linkages will be essential to remain competitive.

Source: Agency Kampuchea Press