PHNOM PENH, June 6 (Xinhua) — Cambodia’s economic activity picked up in the first quarter of 2024, driven by a revival of services and goods exports, despite subdued domestic demand, said the World Bank’s Cambodia Economic Update released on Thursday.
Economic growth is expected to improve marginally to 5.8 percent in 2024, up from 5.6 percent in 2023, and should further strengthen by 6.1 percent in 2025 and 6.4 percent in 2026 as revival in garment, travel goods, and footwear exports and tourism propels the ongoing recovery, the report said.
“To sustain economic growth, Cambodia needs to maintain macro-financial stability by restoring fiscal space and safeguarding its financial sector,” World Bank Country Manager for Cambodia Maryam Salim said at the report’s launching event.
“Cambodia can also strengthen competitiveness by improving the business climate, streamlining trade procedures at borders, making the energy supply more reliable, and strengthening education,” she added.
International tourist arrivals continued to improve in the first quarter to 84 percent of pre-pandemic levels, the report said, adding that exports of garments, travel goods, and footwear rebounded, while non-garment exports, especially those of agricultural commodities, remained resilient.
The Association of Southeast Asian Nations (ASEAN) region has emerged as Cambodia’s second-largest export market after the United States, it said, adding that rising foreign investment in manufacturing and agriculture also contributed to the recovery.
The report said inflation declined to zero in March as food prices decelerated, while the current account recorded an unprecedented surplus in 2023 as the trade deficit narrowed and tourism receipts rose.
It added that construction activity remains subdued, however, as the property market correction continues. As a result, domestic credit growth has slowed significantly, weighing on private consumption and domestic revenue collection.