Home breadcru News breadcru Announcement breadcru Cambodia's economic growth to slow down to 5.3% in 2023: ADB

Cambodia's economic growth to slow down to 5.3% in 2023: ADB

21 Sep '23
2 min read
Pic: Shutterstock/gopixa
Pic: Shutterstock/gopixa

Insights

  • Cambodia's 2023 economic growth is projected to be 5.3 per cent, a reduction from the initial 5.5 per cent projection, as per the ADB.
  • The dip was influenced by an 18.6 per cent decrease in exports of goods including garments and footwear in the first half of 2023.
  • The industry output growth forecast has been adjusted to 4.8 per cent from 5.8 per cent.
Cambodia’s economic growth in 2023 will be slightly lower than earlier forecast, down to 5.3 per cent from 5.5 per cent, mainly due to slower-than-expected industry growth in the first half (H1), as per the Asian Development Bank (ADB). The country’s 2024 growth forecast stands at 6.0 per cent.

Exports of goods including garments and footwear declined by 18.6 per cent year-on-year (YoY) in H1 2023. This was partly offset by a 22.9 per cent increase in exports of goods other than garments, according to the Asian Development Outlook (ADO) September 2023, ADB’s latest flagship economic report.

The forecast for industry output growth is revised from 5.8 per cent to 4.8 per cent. The report maintains the inflation forecast for this year at 3.0 per cent and next year at 4.0 per cent. 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.

“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. Services are the main contributor to growth as the sector exceeded expectations in the first half of the year, primarily fuelled by robust tourism recovery,” said ADB country director for Cambodia Jyotsana Varma.

ALCHEMPro News Desk (NB)

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