PHNOM PENH: A World Bank report from May 18, 2023, said that the Cambodian economy is on the path to a strong recovery led by growth in exports, agricultural production and services. It also noted an increase in foreign arrivals as Cambodia hosts the Southeast Asian Games and the ASEAN Para Games.
According to the World Bank's Cambodia Economic Update: Post-Covid-19 Economic Recovery, Cambodia's economy showed a real growth of 5.2% in 2022. The country has seen a strong recovery in services, especially trade, travel and hospitality, helping bring Cambodia back to pre-Covid growth levels. It also credited global oil and food prices remaining stable for allowing services to grow.
With the agricultural sector expanded due to improved access to regional markets after the newly ratified trade agreement, economic growth is projected to reach 5.5% in 2023. However, the continued decline in overseas demand could continue to weaken export-oriented production, while a continued global reduction in spending could highlight risks in Cambodia’s future.
The World Bank Country Manager for Cambodia, Maryam Salim said, “To safeguard its economic recovery, Cambodia needs to diversify its tourism products and destinations and improve its trade competitiveness by boosting connectivity, reducing trade barriers, and streamlining customs procedures.”
Cambodia's economic growth is expected to reach 6% as a result of strong goods and services exports in addition to a sharp increase in investment, especially under public-private partnerships for large infrastructure projects such as seaports and roads. Cambodia can contribute to this growth by investing in connected infrastructure and human resource development, protecting financial stability, and promoting export diversification to increase the resilience and competitiveness of the economy.
The report places special focus on how Cambodia has been able to increase social sector spending in recent years, particularly in the areas of health and education. It notes, however, that the quality of those expenditures could be improved. In particular, operational efficiency can help address the unequal distribution of teachers among class levels and low public trust in public health facilities.
