PHNOM PENH: Cambodia’s economy is expected to expand at 5.6 percent in 2023, supported by the growth of garment product export, agriculture, and tourism, the Ministry of Economy and Finance said on Wednesday.
The ministry said in Cambodia’s Macroeconomic Situation at a Glance 2022-2023 that the exporting sectors, especially the garment sector, are expected to slow down with a 5.5 percent growth due to unfavorable external demands, especially in the EU market.
The non-garment sector, meanwhile, is expected to continue to remain favorable with a growth of 11.7 percent, supported by the high potential of some export productions –furniture, solar, electronic components, etc., and productions for domestic demand, particularly food and beverage, the ministry said.
The construction and real estate sectors are expected to continue to have a slow pace with a growth of 1.1 percent and 1.2 percent, respectively, due to the slow recovery of foreign capital flow. However, these sectors are continuously supported by investment and domestic demand (housing markets) and the rising trend of construction activities for the industry as well as domestic services.
The agricultural sector is estimated to maintain a favorable growth at 1.1 percent, thanks to the crop sub-sector including rice and other industrial and subsidiary crop –cassava and corn, and the livestock and poultry sub-sector, especially pig production.
The tourism sector (hotel and restaurants) is expected to continue rising with a growth of 32.7 percent due to the continuation of recovery of global and regional people’s mobility, the ministry said, adding that domestic tourists continue to increase due to further improvement of tourism services and destinations, as well as convenient supporting infrastructure.
This outlook, however, is surrounded by risks and uncertainties such as the rising of regional and global geographical tensions, further global economic slowdown, and the tightening of monetary policy longer than expected, particularly the U.S, as well as the appreciation of the U.S. currency which could affect the flow of investment and trade.
“Cambodia will strengthen and revive its economic growth drivers and seize the new opportunities that are emerging in line with the global and regional trends, to build up a long-term economic growth model,” the ministry stressed.
For 2022, the Cambodian economy continues to pick up with an estimated growth of 5.2 percent on the back of strong external demand notwithstanding rising geographical tension and the escalating war in Ukraine.