PHNOM PENH: The World Bank forecasts Cambodia’s economic growth to reach 5.8% in 2024, driven by a surge in exports and a rebound in service industries. Their recent Economic Update highlights a pick-up in economic activity during the first quarter, despite lower domestic demand.
“Maintaining macroeconomic stability is crucial for sustained growth,” said Mrs. Maryam Salim, World Bank Country Manager for Cambodia. “This includes rebuilding fiscal space and ensuring a healthy financial sector.”
The report emphasizes several areas for boosting Cambodia’s competitiveness: improving the business environment, streamlining trade procedures, enhancing energy reliability, and strengthening education.
Tourism is on the rise, with arrivals reaching 84% of pre-pandemic levels in the first quarter. Garment, travel goods, and footwear exports are also rebounding, while exports of agricultural products remain strong. Notably, ASEAN has become Cambodia’s second-largest export market after the United States.
The report credits rising foreign investment in manufacturing and agriculture for contributing to the recovery. Additionally, inflation fell to zero in March due to lower food prices, and the current account achieved a surplus in 2023 thanks to a narrowing trade deficit and increased tourism revenue.
However, construction activity remains subdued due to an ongoing property market correction. This has slowed down domestic credit growth, impacting private consumption and government revenue collection.
Looking ahead, the World Bank predicts Cambodia’s economic growth to further accelerate, reaching 6.1% in 2025 and 6.4% in 2026. This continued recovery will be fueled by the ongoing revival in key export sectors and tourism.