World Bank maintains forecast for Cambodia’s economic growth of 4.5% this year
International Business News – The World Bank’s economic forecast for Cambodia remained unchanged, with the economy expected to grow by 4.5 percent for the full year of 2022.
The World Bank released its latest economic outlook, which forecasts Cambodia’s economy to grow by 4.5% in 2022, driven by the continued recovery of economic activity and commodity exports from the epidemic.
In the first half of 2022, Cambodia’s merchandise exports reached $4.8 billion, up 26% from the same period last year, the World Bank said. Manufacturing industries such as clothing, footwear, electronics and auto parts are recovering, and Cambodia’s exports to the United States have maintained rapid growth.
In any case, the World Bank warned that the global oil and food crises are pushing up inflation, despite the strength of Cambodia’s domestic economy. Poor and vulnerable households with limited reserves could bear the brunt of higher oil prices.
The World Bank noted that Cambodia’s fiscal deficit is expected to widen to 6.3% of GDP, as the government will need to continue spending plans to help the poor and vulnerable.
World Bank Cambodia Country Manager Marian Sarin said the government’s strategy to live with the coronavirus has enabled Cambodia to reopen and thereby achieve economic recovery. However, the future outlook remains unclear. The Russian-Ukrainian war has led to higher global energy and food prices placing a greater burden on poor households, which will slow down the pace of poverty reduction.
In the medium term, new investment laws and free trade agreements will help boost investment and trade, the Bank said. The World Bank recommends Cambodia to reduce logistics costs, enhance trade competitiveness, expand transport networks and improve infrastructure.
Cambodian Prime Minister Hun Sen recently stated that if the epidemic continues to be effectively controlled, Cambodia’s economy will perform better in the future.
Affected by the epidemic, the Cambodian economy will shrink by 1.9% in 2020 and rebound to 2.4% in 2021. The Cambodian government predicts that the economy will grow by 5.4% in 2022. In order to further strengthen the herd immunity barrier, Hun Sen called on the public to actively receive booster shots of the new crown vaccine, including the third, fourth and fifth shots.