PHNOM PENH: The International Monetary Fund (IMF) has revised its 2023 economic growth projection for Cambodia to 5.6 percent from its prediction of 5.8 percent in April, due to weak external demand.
Demand in the U.S. and European markets is weak, playing a role in the slightly weaker growth, said Mr. Shanaka Peiris, Division Chief of Regional Studies at the IMF’s Asia and Pacific Department.
“Cambodia is very exposed to the U.S. and European markets, and demand there is weaker,” Mr. Shanaka Peiris said in an online press conference on the Regional Economic Outlook for Asia and the Pacific on Oct. 18.
The Regional Comprehensive Economic Partnership (RCEP) agreement has helped diversify Cambodia’s economy and exports, reducing the country’s reliance on exports to the U.S. and Europe, he added.
“Cambodia will benefit from this mega-regional trade pact for the long term,” he stressed.
The mega trade pact came into force in January 2022.
Cambodia’s economy traditionally relies on garment, footwear, travel goods exports, tourism, agriculture, real estate, and construction.
Cambodia exported $8.14 billion worth of garments, footwear, and travel products to international markets in the first nine months of 2023, a year-on-year decrease of 17.8 percent, according to a Ministry of Commerce report.
According to the IMF, Cambodia’s economic growth will be 6.1 percent in 2024.