Cambodia is expected to register a 5.6 percent GDP growth in 2023, according to the Ministry of Economy and Finance.
The Kingdom, which was estimated to have posted a 5.2 percent growth last year, is set to register further growth this year despite facing some global uncertainties including the ongoing Ukraine war, inflation, increase in interest rates, and the resurgence of Covid-19 in various parts of the world.
Addressing a public forum on Macroeconomic Management and Budget Law 2023 at Sofitel Phnom Penh Phokeethra yesterday, Vongsey Vissoth, Minister attached to the Prime Minister and Permanent Secretary of State, Ministry of Economy and Finance, said, “Cambodia’s economy continues to pick up with an estimated growth of 5.2 percent in 2022 on the back of strong external demand notwithstanding rising geopolitical tension and the escalating war in Ukraine. Herd immunity has allowed Cambodia to resume its socioeconomic activities and successfully reopen the country in late 2021.”
Talking about the prospects of the country this year, he said: “For 2023, Cambodia’s economy is expected to expand, yet at a slower pace, with a growth of 5.6 percent. The growth of exporting sectors, especially the garment sector, is expected to slow down with a 5.5 percent growth due to the unfavourable external demands, especially EU market.”
However, the non-garment sector is expected to continue to remain favourable with a growth of 11.7 percent, supported by the high potential of some export productions (furniture, solar and electronic components etc.) and productions for domestic demand, especially food and beverages productions, the ministry said.
The garment industry, which registered 10.8 percent growth in 2021 and 2022, is expected to post a lesser growth of 5.5 percent this year.
“For 2022, the hotels and restaurants sector (which share a strong and close relationship with tourism) is expected to experience a robust two-digit growth rate of 30 percent after declining for two consecutive years,” it said.
The arrival of more tourists is expected to boost tourism further this year. A total of 2.28 million international tourists were expected to have visited various places in the country last year. Domestic tourism also received a boost, with the number reaching 13.93 million in 2022, up from 4.66 million in 2021.
The growth is poised to continue this year, with an expectation of around 4.3 million international tourists and 14 million domestic tourists.
“The easing of restrictions in China, along with the SEA Games, will help attract international tourists to Cambodia. In addition, domestic tourists continue to increase due to further improvement of tourism services and destinations, as well as convenient supporting infrastructure,” it said.
The wholesale and retail sector is also expected to do well this year, with an estimated growth of 6.5 percent, up from 4.3 percent last year.
The transportation and agriculture sectors are also poised for impressive performances this year.
Transportation is estimated to grow at 7.6 percent in 2023, up from 6.1 percent growth last year.
“Agriculture is expected to maintain positive growth at 0.7 percent, buoyed by a robust performance of livestock and poultry and crop production, particularly subsidiary and industrial crops (cassava and corn),” it pointed out.
Construction and real estate are estimated to have low growth rates of 0.5 percent and 0.2 percent, respectively.
The wholesale and retail sectors are expected to grow by 4.3 percent due to a rebound in domestic consumption, especially in food and beverage.
The ministry pointed out that consumer price inflation has spiked in 2022, reflecting soaring global energy and other commodity prices. Rising global energy and other commodities prices automatically pass-through to domestic prices.
“This year, inflation is expected to surge by 5.3 percent. CPI transport is estimated to soar by 9.6 percent while CPI food is expected to increase up to 5.0 percent.”
This article was first published in Khmer Times. All contents and images are copyright to their respective owners and sources.
