ADB Revises Cambodia’s 2023 Economic Growth Forecast to 5.3% from 5.5%

• 26 September 2023
• Local News
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The Asian Development Bank (ADB) has adjusted its economic growth forecast for Cambodia, revising it from an initial estimate of 5.5% to 5.3% for 2023. This slight modification comes in light of slower-than-anticipated industrial growth during the first half of the year, with a notable 18.6% YoY decline in exports of clothing, footwear, and goods, according to ADB’s report released on 20 September 2023.

However, the dip in these sectors was offset by a promising 22.9% surge in exports of non-garment priority items, including automotive parts, solar panels, and furniture.

Jyotsana Varma, ADB Country Director for Cambodia, emphasised the importance of boosting exports to maintain economic growth throughout the remainder of the year. She noted that despite a slower start to domestic industrial growth earlier in the year, the service sector outperformed expectations in the first half of 2023, driven by a robust recovery in tourism.

The revised economic growth forecast for 2023 includes an anticipated increase in the service sector from 7.3% to 8.0%, a decrease in the industrial sector from 5.8% to 4.8%, and a slight dip in the agricultural sector from 1.1% to 0.9%.

Furthermore, the report indicates that the inflation rate is expected to remain steady at 3.0% for the current year and rise slightly to 4.0% in 2024.

ADB’s commitment to Cambodia is substantial, with approximately US$2.4 billion invested in the country. It has maintained a consistent annual investment of around US$350 million from 2016 to 2022. Moreover, ADB is preparing for a strategic partnership with Cambodia spanning 2024 to 2028, further strengthening its support for the nation’s economic development.

• Analysis
• Economy and Finance