WB Warns:  Limited transportation and logistics and unreliable power supply slowed Cambodia’s economic recovery

• 24 November 2023
• Local News
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The World Bank warns that Cambodia’s economic growth may be further affected by weak global demand or rising food prices for the future as domestic issues face rising household debt and domestic credit. Real estate remains a risk, according to WB’s press release on 22 November 2023.

External Challenges: A Global Tapestry Impacting Local Prosperity: The World Bank underscores the influence of external factors such as the ongoing global epidemic, the conflict between Russia and Ukraine, and soaring international interest rates. These elements have collectively contributed to a growth rate of 5.4 percent in 2023, slightly below the initial projection of 5.5 percent, with expectations pegged at 5.8 percent in 2024 and an optimistic 6.1 percent by 2025. The anticipation of increased infrastructure investment and the benefits of Cambodia’s regional trade agreements form the basis for this outlook.

Internal Struggles, Infrastructure and Economic Diversification: Internally, Cambodia grapples with issues in its transport and logistics systems, compounded by an unreliable power supply. Despite prior investments in public infrastructure, these persisting challenges impact both businesses and consumers, adding strain to associated costs. The manufacturing sector, particularly garments and exports, has witnessed a decline, leading to a 5 percent reduction in employment.

Prescriptive Approach for Sustainable Growth

“In order to maintain Cambodia’s economic growth, it is necessary to help the private sector to function as a locomotive and to act immediately. To improve the public sector,” said Maryam Salim, Managing Director of the World Bank in Cambodia.

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