PHNOM PENH: The Asian Development Bank (ADB) forecasts that Cambodia's economic growth in 2023 will be slightly lower than the expected 5.5%, coming in at 5.3% for the year.

Cambodia's economic growth in 2024 is projected to reach 6%. Exports of garments, footwear and travel goods fell 18.6% in the first half of 2023, according to the ADB. The decline was partly offset by a 22.9% increase in exports from auto parts, solar panels and furniture.

The ADB has forecast that the services sector will grow from 7.3% to 8.0% in 2023, according to the report. The forecast for industrial growth was reduced from 5.8% to 4.8% and the forecast for agricultural growth was revised from 1.1% to 0.9%. This report keeps the inflation forecast for this year at 3.0% and next year at 4.0%.

ADB Country Director for Cambodia Jyotsana Varma said, “Expectations for better economic growth in major developed countries are expected to boost Cambodia's exports for the second half of 2023. Growth in the domestic industry slowed in the first half of this year. The services sector contributed the most to this year's economic growth, exceeding expectations in the first half, especially due to the strong recovery in tourism."

Risks for this outlook include weak economic growth in developed countries, fewer tourist arrivals and foreign direct investment inflows, prolonged tightening of global financial conditions, rising energy prices, concerns over private debt, and climate change creating worsening conditions.

ADB investment in Cambodia totals $ 2.4 billion, with the average annual lending from 2016 to 2022 is about $ 350 million. The Asian Development Bank is developing its new Country Partnership Strategy for Cambodia for 2024-2028.

The ADB is committed to achieving environmental prosperity, resilience and sustainability in the Asia-Pacific region in line with its efforts to eradicate extreme poverty. Founded in 1966, the bank is governed by 68 member countries, including 49 countries from Asia and the Pacific.