Cambodia’s Economy to Grow at 7.2% Driven by Strong Construction Activities

• 13 September 2018
• Local News
• 3256 Views

The ASEAN+3 Macroeconomic Research Office (AMRO) has forecast that Cambodia’s economy is to grow at 7.2% in 2018, supported by strong construction activities and other important sectors such as garment manufacturing and tourism-related services.

The forecast came as a result of AMRO’s preliminary assessment following its Annual Consultation Visit to Cambodia on September 4 to 12, 2018.

“Cambodia’s economy is expected to grow at 7.2 percent in 2018, slightly higher than 7.0 percent in 2017, while inflation remains relatively low and stable,” said AMRO Lead Specialist Dr Seung Hyun Hong.

The report said that additional support to growth in 2018 will come with high government spending because of rising public investment and public sector wages.

“Cambodia’s external position continues to strengthen, reflecting robust foreign direct investment (FDI) inflows which more than cover the current account deficit. As a result, the overall balance remains in surplus leading to a build-up in foreign reserves from US$6.7 billion in 2016 to US$8.8 billion in 2017,” it said.

However, to ensure the country’s strong growth momentum, Dr Seung Hyun Hong said that the authorities need to strengthen their policy efforts to accelerate structural reforms, safeguard financial stability, and reprioritise fiscal resources towards growth-enhancing spending.

According to the National Bank of Cambodia (NBC), there has been a significant increase in investment in construction projects, up by 14% across 1,742 projects with residential housing accounting for more than 80% of the total projects. (Read more)

• Analysis
• Business and Market