Cambodia’s Economy Slated to Grow 6% in 2023

The National Bank of Cambodia has estimated the nation’s economy will grow by about six percent amid global challenges
National Bank of Cambodia (NBC) in Phnom Penh, December 21, 2022. Kiripost/Siv Channa
National Bank of Cambodia (NBC) in Phnom Penh, December 21, 2022. Kiripost/Siv Channa

Cambodia's economy is predicted to grow by roughly six percent in 2023 despite global challenges, according to the National Bank of Cambodia (NBC).

According to NBC's Outlook for 2023, the projected growth rate of six percent is supported by a 6.9 percent increase in the garment industry and a 14.3 percent increase in non-garment produced products.

It added that the tourism industry is expected to rise by 18.5 percent due to an increase in local and international visitor arrivals as airline operations from China to Cambodia gradually restart and travel restrictions for Chinese citizens traveling overseas are lifted.

Moreover, the agriculture industry is expected to grow by 1.1 percent as a result of the implementation of the Regional Comprehensive Economic Partnership Agreement (RCEP) and Bilateral Free Trade Agreements (FTAs), as well as the removal of the tariff preference for rice imports into European markets.

However, the construction and real estate sectors are predicted to increase at a slower pace, at 1.7 percent and 1.2 percent respectively, with growing domestic demand in the inexpensive real estate market segment and non-resident market demand for high-end homes taking some time to recover to pre-crisis levels.

In 2023, inflation is unpredictable due to the continuance of the Russia-Ukraine war and the global economy's uncertainty. In the event of a worldwide economic downturn and declining food costs, Cambodian inflation is expected to fall to 2.5 percent.

In 2022, Cambodia's economy rose by 5.1 percent led by a 9.4 percent expansion in manufacturing, 15.2 percent in hotels and restaurants, 6.1 percent in transportation, and 4.5 percent in wholesale and retail commerce.

Meanwhile, exports grew by 19.8 percent, far faster than imports, which increased by eight percent; tourist income jumped by 6.6 percent, while remittances from Cambodian employees working abroad increased by four percent.

Furthermore, foreign direct investment inflows also increased by four percent, owing mostly to the textile and food processing industries, while inflows to several other sectors remained modest.