The National Bank of Cambodia (NBC) has predicted a healthier economic growth rate coupled with a decline in inflation for Cambodia in 2024 amidst a global economic climate facing headwinds due to geopolitical tensions and rising interest rates.
In its latest report issued on Monday, the central bank forecast that Cambodia’s Gross Domestic Product (GDP) is expected to expand by a robust 6 percent in 2024, supported by improved external and domestic conditions.
Global growth was predicted at 3.2 percent this year by the IMF, higher than the previous forecast, mainly on account of greater-than-expected resilience in the U.S. and faster economic recovery in China, which are also Cambodia’s main trading and investment partners, stated the central bank.
‘The Cambodia’s economy is supported mainly by exports both garment and non-garment products, increasing of tourism sector and related sectors, while agricultural sector grows at a slower pack,’ said NBC Governor H.E. Dr. Chea Serey in a workshop on an occasion
of launching of the Financial Stability Review 2023 held on May 20.
‘The Regional Comprehensive Economic Partnership (RCEP) and other Free Trade Agreements (FTAs) could attract more FDIs and help Cambodia to diversify its productions and exports,’ she said.
The report acknowledged potential challenges, including geopolitical tension, prolonged tightening of monetary policies in advanced countries, weaker-than expected growth in China, and climate change. Those risks could cause slower global economic and trade activities, which could affect exports, investment, and capital flows into Cambodia.
Central bank governor, however, highlighted the resilience of Cambodia’s banking system amid the successive external challenges.
‘Facing these potential challenges, the NBC will continue collaboration with relevant authorities to ensure the strength of Cambodia’s banking system and will introduce necessary measures forward to support economic growth and maintain the national financial stability,’ H.E. Dr. Chea Serey
said.
Cambodia’s economic growth is mainly driven by garment export, tourism, agriculture, as well as construction and real estate.
NBC predicted that inflation in Cambodia to remain low and manageable. The inflation rate, which reached a peak of 2.1 percent in 2023 due to rising global fuel and food prices, is projected to fall to 2 percent by year-end.
Source: Agence Kampuchea Presse