Cambodia on course for 6 percent growth target
Cambodia on course for 6 percent growth target
The Cambodian economy is on course to achieve the predicted six percent growth this year, according to a half-year assessment of the Ministry of Economy and Finance (MEF).
The ministry’s August 9 report on ‘The Results of the Implementation of the Budget for the First Half of 2024 and the Evaluation of the Implementation of the Law on Financial Management 2024’ was based on regular monitoring of key indicators and the data obtained in the first six months of 2024.
Accordingly, the inflation rate of about 2.7 percent is lower than what was expected at the time of drafting the 2024 financial law.
Some main sectors recovered while in others growth slowed amid uncertainty over global economic conditions and the scars of the Covid-19 crisis which continues to have a negative impact.
“The country’s industrial sector is expected to grow at around 7.9 percent due to the gradual recovery of the garments sub-sector, combined with maintaining the robust movement of the non-garment manufacturing sub-sector, while the construction sub-sector continued to grow slowly,” read the report.
In fact, in the first six months of 2024, garment exports increased by 16.9 percent, while the imports of garments by volume increased by 29.8 percent, indicating the rising trend in production and export activities for the coming months.
The report added that the services sector continued to maintain good growth at around 5.8 percent due to the continued growth of the hospitality sub-sector and food services combined with other support services such as the wholesale-retail sub-sector and the transportation sub-sector.
The hospitality and food service sub-sector is expected to continue its upward trend with a growth rate of 12.6 percent.
The MEF report added that the agricultural sector is estimated to maintain a growth rate of around 0.7 percent, supported by good growth of the crop sub-sector and recovery of the fisheries sub-sector.
As of June 2024, the rise in agricultural exports included a 2.5 percent increase for rice, 73.5 percent for cassava, 23 percent for rubber, and 51.2 percent for mangoes. Banana exports, however, fell 23.1 percent.
Socio-economic researcher Chey Tech told Khmer Times that Cambodia’s economic growth shows the success of the policies of the Royal Government, especially the attractive provisions for investment promotion.
“For Cambodia to achieve the target of becoming an upper middle-income country by 2030 and a high-income country by 2050, it needs to make further reforms including in facilitation of trade, tax laws and service sector,” Tech said.
Prime Minister Hun Manet said in June that the Cambodian economy will continue to grow in 2024 and achieve even higher growth in 2025, with all sectors showing fast recovery.
“Our economy slowed due to the impact of Covid-19, global economic problems and wars but in 2023 Cambodia grew by five percent. In 2024, this will go up to six percent, and next year it may rise even more,” Mr Hun Manet was quoted as saying.
The MEF said that the global economy in 2024 is expected to achieve the same growth rate as last year at 3.2 percent. This growth is still slow and is below the average growth rates before Covid-19 due to rising inflationary pressures, monetary policy tightening and the gradual withdrawal of fiscal support policies.
