ADB Revises Cambodia’s 2024 Growth Forecast from 6%  to 5.8% as Exports and Tourism Recover

• 4 October 2024
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The Asian Development Bank (ADB) has revised its economic growth projection for Cambodia in 2024, lowering it from 6% to 5.8%, reflecting cautious optimism amidst recovering exports and a strong tourism rebound. These changes were noted in the ADB’s latest economic outlook report, released on 5 October 2024.

This adjustment aligns with earlier forecasts by the World Bank. ADB also forecasted 6.0% growth for 2025, with inflation-adjusted sharply from 2.9% to just 0.5%, citing rising food prices and falling fuel costs as key factors.

The bank’s assessment highlights a strong export recovery, especially in the textile sector, with clothing, footwear, and travel products rebounding by 16.9% year-on-year in the first half of 2024, reversing the 18.6% decline from the previous year. However, exports of other pharmaceutical products saw modest growth at 1.3%, down from 21.2% during the same period in 2023. Construction materials and equipment imports rose by 23.3%, driven by increased public infrastructure investments, a key contributor to economic expansion.

Regarding sectoral performance, Cambodia’s agricultural sector is projected to grow by 1.2% in 2024 and 1.3% in 2025, while the services sector is expected to grow at 5.4% in 2024 before easing to 5.2% in 2025. The recovery of the tourism industry has been a crucial driver, with international arrivals surging by 22.7% year-on-year in the first half of 2024, nearly reaching 94.8% of pre-pandemic levels. The rise in tourist arrivals and robust infrastructure investments underpins the projected growth.

Foreign direct investment continues to flow into Cambodia, with USD 2 billion recorded in the first half of 2024, compared to USD 2.1 billion during the same period last year. The non-financial sector has been a major recipient of these investments, while the financial sector saw a decline due to lower profitability in the banking industry.

Despite the modest downgrade in growth, the ADB remains optimistic that Cambodia’s key sectors—textiles, agriculture, and tourism—along with continued foreign investment, will fuel strong growth in 2025 and beyond, creating a positive economic outlook for the country. (Read more and more)