WB projects Cambodia’s growth at 5.3% this year
WB projects Cambodia’s growth at 5.3% this year
Cambodia’s economic growth is projected to reach 5.3 percent in 2024, up from five percent in 2023, according to the World Bank’s ‘Cambodia Economic Update: From Recovery to Resilience – Harnessing Tourism and Trade as Drivers of Growth,’ released yesterday.
During a discussion on the latest update, Tania Meyer, Country Manager of the World Bank for Cambodia, emphasized that to maintain long-term growth, the country must prioritize financial and infrastructure sector reforms.
“Strengthening the financial and infrastructure system is essential for providing the necessary resources and stability to support Cambodia’s development goals,” Meyer said.
Meyer also stressed the importance of accelerating structural transformation within the economy.
Meanwhile, senior economists from the World Bank delivered presentations on the general state of Cambodia’s economy. Ly Sodet, Senior Economist at the World Bank, discussed Cambodia’s economic development and outlook, while Faya Hayati, also a Senior Economist at the World Bank, focused on the topic, ‘Structural, Firm, and Business Barriers to Labour Productivity.’
Cambodia has traditionally relied on a few key sectors, and reducing this dependence is crucial for creating a more resilient and diversified economic foundation. By expanding into new sectors and modernizing existing ones, Cambodia can ensure that growth is more balanced and sustainable.
Infrastructure development plays a key role in supporting this transformation. Investing in infrastructure is not only necessary for boosting economic activity but also for enabling modernization and digitalization.
These advancements can further enhance Cambodia’s global competitiveness, positioning the country as a leader in regional economic growth.
The World Bank’s report calls for comprehensive reforms in both the financial sector and infrastructure, as well as a focus on modernization and inclusivity. By addressing these areas, Cambodia can continue to build a strong, sustainable and competitive economy for the future.
Sodet highlighted that Cambodia’s economic activity remained stable in 2024, supported by a recovery in exports. However, he pointed out that the performance across the country’s key economic sectors remains uneven, with some areas showing stronger growth than others.
To address these challenges, he stressed the importance of fiscal reforms that are critical to boosting domestic revenue mobilization. “Strengthening taxes on goods and services, alongside introducing a personal income tax (PIT) in the medium term, are essential steps to ensure sustainable public finances and economic resilience,” Sodet said.
He also emphasized the importance of maintaining macro-financial stability and noted that rising nonperforming loan ratios are a concerning trend, signalling a deterioration in asset quality.
This poses risks to the financial system and requires immediate attention to prevent further weakening. Overall, while Cambodia’s economy shows steady growth, these fiscal and financial challenges must be addressed to ensure long-term stability and resilience.
Sodet further emphasized the need for a transition to sustainable growth through structural reforms to boost and diversify exports and services, as well as to fast-track reforms aimed at improving the ease of doing business.
Faya Hayati, Senior Economist at the World Bank, explored how various structural factors, company-level challenges, and broader business barriers hinder productivity in labour markets, offering insights into potential solutions for economic growth and development.
During the final session of the event, a panel discussion was moderated by Sebastian Eckardt, Practice Manager for the East Asia and Pacific Region at the World Bank. The panel included Suon Sophal, Deputy Secretary General of the Cambodian Investment Board, Elida Kimsrun, tourism entrepreneur and former board member of Cambodia Women Entrepreneurs Association (CWEA) and James Roberts, Head of Advisory at KPMG Cambodia.
