Economy

Tourism to Bump Up Cambodia’s GDP to 6.2% in 2023

Amid economic improvement with rising foreign visitors, Cambodia’s tourism recovery is expected to improve in 2023 pushing GDP to 6.2 percent
Factory workers buy food in Phnom Penh. Kiripost/Siv Channa
Factory workers buy food in Phnom Penh. Kiripost/Siv Channa

The continued recovery of international tourism is expected to improve Cambodia’s gross domestic product (GDP) growth to 6.2 percent in 2023, the International Monetary Fund (IMF) blog stated last week.

The upward projection is a revision from the 5.5 percent economic outlook made during the completion of its Article IV consultations with the government and central bank this year.

For 2022, the global financial institution expects GDP to expand to 5.1 percent amid rising inflation, which hit 7.8 percent in June before declining to 4.9 percent in August.

According to the IMF blog, Cambodia and Thailand will expand faster in 2023 on a likely pickup in foreign tourism.

It noted that Southeast Asia, unlike the rest of Asia, will enjoy strong recovery, including Vietnam in view of its significant role in the global supply chain.

While still a “bright spot” in an “increasingly dimming” global economy, Asia faces strong headwinds which will be persistent.

These include the rise of government borrowing costs due to interest rate hikes by central banks in major advanced economies, reduced external demand for Asian exports because of lower economic activity in Europe, and China’s zero-Covid policy.

Back in Cambodia, the tourism sector has charted growth since the start of the year. Between January and August this year, nearly one million foreign visitors entered the country, as per Ministry of Tourism statistics. This compares to 121,707 visitors in the corresponding period in 2021.

Of the total, Thai nationals represented the largest number of arrivals at 348,660 (34.9 percent), followed by Vietnamese (23.6 percent) and Chinese (5.1 percent).

Meanwhile, a shift in the Chinese travel market is anticipated as China Southern Airlines plans increases in round-trip flights between Guangzhou and Phnom Penh starting tomorrow, according to China Daily, which quoted the company.

In the past week, China Southern and China Eastern Airlines have added capacity by 36 percent and 33 percent respectively, which amounted to 600,000 seats in total, aviation data by OAG showed.

For Cambodia, the Chinese travel market largely supported the tourism sector between 2017 and 2020.