Cambodia’s economy will enjoy healthier growth in 2024 despite the downturn in real estate
Cambodia’s economy will enjoy healthier growth in 2024 despite the downturn in real estate
A government official and experts have said that Cambodia’s economy still enjoyed rosier growth in 2024 despite a downturn in the real estate sector.
Economy and Finance Minister Aun Pornmoniroth said the economy was projected to grow by around 6 percent in 2024, up from 5 percent in 2023, boosted by a recovery in the garment sector, a rise in non-garment manufacturing, and a gradual recovery in the tourism industry.
“Cambodia’s economy is set to continue its upward trajectory,” he told the parliament during a 2025 budget law debate in late November.
“For 2025, Cambodia’s economy is forecast to achieve a growth rate of around 6.3 percent, which will push up the kingdom’s gross domestic product (GDP) to $51.39 billion,” he said.
Pornmoniroth, who is also a deputy prime minister, said the country’s GDP per capita was estimated to reach $2,924 in 2025.
Cambodia’s economy mainly depends on garment, footwear and travel goods exports, construction and real estate, tourism and agriculture.
He said that in 2025, the industrial sector, mainly garment and construction, is predicted to grow by 8.6 percent; the service sector, mainly tourism, transport, telecom, trade and real estate, is expected to increase by 5.6 percent; and agriculture is projected to rise by 1.1 percent.
He added that the country’s inflation is forecast at 2.5 percent in 2025 thanks to domestic economic momentum and the normalcy of international trade and the price of goods.
World Bank senior country economist Ly Sodeth said on Thursday that the World Bank forecast Cambodia’s economic growth at 5.3 percent in 2024, up from 5 percent in 2023, buoyed mainly by trade, tourism, and foreign direct investment.
“Economic activity held steady in 2024, driven by a rebound in services and goods exports. However, sector performance remains uneven,” he said at the launch of the World Bank’s Cambodia Economic Update in Phnom Penh.
The World Bank’s report said real estate and property investment remained subdued.
“The downturn in the property sector continued reflecting overcapacity in the property market and a continued housing market correction,” the report said.
According to the report, during the first eight months of 2024, the approved property development project value reached 3.3 billion dollars, marking a 29.1 percent year-on-year decline, driven by a decline in investment in residential property.
Hong Vanak, director of the international economics department at the International Relations Institute of Cambodia under the Royal Academy of Cambodia, said the real estate market remained quiet in 2024.
“We hope the real estate market will recover gradually from 2025 if the garment, footwear and travel goods sector, tourism, and agriculture as well as foreign direct investment continue their upward trends,” he told Xinhua in a recent interview.
Vanak said regional and bilateral free trade agreements (FTAs) such as the ASEAN Free Trade Area, Regional Comprehensive Economic Partnership, Cambodia-China FTA, Cambodia-South Korea FTA, and Cambodia-United Arab Emirates FTA have played a crucial role in supporting Cambodia’s sustainable trade and economic growth in the long term.
“These free trade pacts have provided Cambodia with access to a huge market of approximately 2.3 billion people,” he said.
