Economic outlook positive, ease of doing business still lagging: ADB
Economic outlook positive, ease of doing business still lagging: ADB
Cambodia’s economic outlook remains positive and the economy is forecast to grow at a robust 7 percent this year and next year, according to a report released by the Asian Development Bank on Wednesday.
Growth in exports, strong foreign direct investment, growing tourist arrivals and increasing domestic demand should promote strong growth for the next two years, according to the Asian Development Outlook report.
Potential risks to the Kingdom’s growth remain, however, including the upcoming national election in July, as well as the persistent difficulty of doing business in the country.
“Rising wages require that other costs of doing business be cut to maintain competitiveness with peer economies” the report says. “Great potential exists in simplifying cumbersome business procedures.”
The report calls for an improvement to the judicial system, which “is not seen as effective in resolving commercial disputes”.
The development bank noted that garment and footwear exports were likely to slow in the future, but predicted that would be offset by strong growth in emerging industries, such as electrical parts and automobile components.
Higher demand for imports is set to increase the country’s trade deficit, however the bank expects increased tourism to bring in enough revenue to cushion the rise.
Meanwhile, higher foreign direct investments and official concessionary loans from abroad should be more than adequate to finance the current account deficit, even building up foreign reserves to about $10.0 billion by the end of 2018.
