malaysiangCambodia’s economic growth in 2023 will be slightly lower than earlier forecast, down to 5.3 percent from 5.5 percent, mainly due to slower-than-expected industry growth in the first half, according to an update to the Asian Development Bank’s (ADB) flagship economic report launched on Sept. 20.
The Asian Development Outlook (ADO) September 2023 notes that exports of garments, footwear, and travel items declined by 18.6 percent year-on-year in the first half of 2023.
This was partly offset by a 22.9 percent increase in exports of manufactures other than garments, such as automotive parts, solar panels, and furniture.
Better growth prospects in major advanced economies should boost Cambodian exports for the remainder of 2023 even as domestic industrial growth slowed earlier in the year, said ADB Country Director for Cambodia Jyotsana Varma.
“Services are the main contributor to growth as the sector exceeded expectations in the first half of the year, primarily fueled by robust tourism recovery,” she said.
The service growth projection in 2023 raises from 7.3 percent to 8.0 percent, read the report, adding that the forecast for industry output growth is revised from 5.8 percent to 4.8 percent, and the forecast for agriculture growth from 1.1 percent to 0.9 percent.
The report maintains the inflation forecast for this year at 3.0 percent and next year at 4.0 percent. Improved merchandise trade and tourism recovery should continue to reduce the current account deficit.
Risks to the outlook include sluggish growth in advanced economies, lower tourist arrivals and foreign direct investment inflows, prolonged tightening of global financial conditions, rising energy prices, concerns over high private debt and domestic financial stability, and extreme weather exacerbated by climate change.
The ADB report maintained the country’s 2024 growth forecast at 6.0 percent.
Source: Agence Kampuchea Presse
