Cambodia set for 5.8% growth in 2024; inflation forecast lowered: ADB

“The rebound in the manufacturing sector—especially garments, footwear, and travel goods (GFT) —is powering the country’s economic growth,” said ADB Country Director for Cambodia Jyotsana Varma. “Agriculture and tourism are steadily gaining ground, while continued inflows of foreign direct investment are fueling the country’s economic momentum. Together, these forces are setting the stage for a promising 2024 and positioning Cambodia for robust growth in 2025 and beyond.”

The lowering of inflation forecasts reflects reduced prices of fuel-related goods and services, along with decreased costs of fertilizers, providing support to agricultural production. This will provide much-needed relief for people, especially the most vulnerable, who have faced challenges in recent years due to rising food and fuel prices.

The report highlighted that GFT exports rose by 16.9 per cent year on year in the first half of 2024, rebounding from an 18.6 per cent decline during the same period the previous year. Meanwhile, growth in exports of non-GFT products slowed to 1.3 per cent year on year from 21.2 per cent.

Foreign investment inflows continued although they decelerated somewhat to $2 billion by mid-2024, from $2.1 billion during the same period last year. This was supported by growth in nonfinancial sectors. However, investment in the financial sector slowed appreciably due to lower banking profits.

Potential risks to Cambodia’s economic outlook include weaker growth in major economies like the People’s Republic of China, Europe, and the United States, high private debt, volatile global fuel prices, and severe impact from extreme weather events.

Fibre2Fashion News Desk (KD)