AMRO Forecasts Cambodia’s Economy to Grow 5.6% in 2024 and 5.9% by 2025

• 28 May 2024
• Local News
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The ASEAN + 3 Macroeconomic Research Office (AMRO) recently released a positive outlook for Cambodia’s economy, predicting a growth rate of 5.6% in 2024 and 5.9% in 2025. This upward trend signifies a significant improvement compared to the 5% growth recorded in 2023, according to AMRO press release on 23 May 2024.

Garment Sector & Exports Fuelling Growth

AMRO’s chief economist, Jinho Choi, attributes this projected growth to two key factors: “the recovery of the garment sector, along with the sustainable expansion of other manufacturing exports”.  A resurgent garment industry, coupled with continued growth in non-garment manufacturing exports, is expected to be the primary driver of Cambodia’s economic expansion. Jinho Choi further emphasises that “the recovery of all tourism sectors” will also play a crucial role in bolstering the overall economic.

External Risks & Domestic Considerations

While the outlook is positive, AMRO acknowledges potential challenges.  The report highlights “external risks and domestic vulnerabilities” that could impact the projected growth trajectory.  However, the report doesn’t elaborate on the specifics of these potential risks.

Garment Sector Strength & Foreign Investment

Hoe Ee Khor, another AMRO economist, reinforces the significance of the garment sector. He points to the “increasing demand for consumer goods in key markets” as a major factor propelling garment industry growth.  Furthermore,  Khor highlights the anticipated “strong growth momentum” within the non-garment sector, fuelled by “foreign direct investment flows”.  This suggests a diversified and robust manufacturing base contributing to Cambodia’s economic expansion.

Inflation Forecast

The report also includes an inflation projection, with consumer price index (CPI)-based inflation expected to reach 2.5% in 2024 and 2.6% in 2025.  This relatively stable inflation forecast suggests a controlled economic environment conducive to further growth.

 

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