World Bank Backs Cambodia’s Shift Towards High-Quality Growth with a New $275 Million Credit

PHNOM PENH: The World is approving a $275 million credit to support Cambodia's transition towards achieving sustained, high-quality economic growth, according to a press release issued yesterday on AKP. This marks a new chapter as Cambodia moves past its successful recovery from the COVID-19 pandemic.

“While Cambodia's economy has recovered from the impacts of the COVID-19 pandemic and subsequent shocks, the focus is now shifting toward achieving sustained high-quality growth,” said Ms. Maryam Salim, World Bank Country Manager for Cambodia.

This new credit builds on a $274 million grant approved in 2022 and targets specific challenges hindering Cambodia's high-quality growth aspirations.

The funds will focus on boosting private sector competitiveness through reforms that create a fairer business environment, encouraging new businesses, competition and provide assistance to the most vulnerable.

While Cambodia's economic recovery has been positive, it hasn't fully reached pre-pandemic growth levels. This reflects lingering structural challenges such as weak productivity growth, limited in education and training, obstacles to business formation and competition, and an overdependence on a limited range of products, export markets, and funding sources.

 

The World Bank's new financing aims to address these challenges and pave the way for Cambodia's sustainable, high-quality economic future.

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.

Looking ahead, the World Bank also 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.

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