Economy Ministry: Construction and real estate sector to experience 4-year slow down

• 2 September 2019
• Property Focus
• 5713 Views

The Ministry of Economy and Finance has forecasted that the construction and real estate sectors, the sub-sectors supporting economic growth, are to experience a slowdown from 2019 to 2022, although growth is expected to remain high.

The report, which was handed to reporters during the 30 August Council of Ministers meeting, shows that the construction sector is expected to grow at a speed of 17.3% in 2019 and down to 16.1% in 2020 while in 2021 and 2022 it will decline to 15.5% and 14.9% respectively.

With the same downward adjustment, the real estate sector will grow at 8.8% in 2019 and down to 8.5% in 2020. The figure will continue to decline to 7.9% in 2021 and down further to 7.5% in 2022.

The slow down comes as the country’s GDP in 2019 is forecasted to grow at 7.1% in 2019 and down to 6.5% in 2020 due to external pressures like the possible removal of the ‘Everything but Arms (EBA)’ trade deal with the EU.

Although the growth will slow down, the Ministry of Economy and Finance noted that the construction sector remains strong. This is due to the growth of mid-range and affordable projects through the implementation of the affordable housing projects and investor confidence, which will partially offset the decline in high-end construction.

The construction sector in Cambodia has grown significantly over the last 10 years, receiving a total investment of US$46.24 billion as of July 2019, for about 46,130 construction projects.

As of June 2019, the Ministry of Land Management Urban Planning and Construction (MLMUPC) approved 2,047 construction projects with an estimated investment value of more than US$3.3 billion, an increase of 24.5% in projects and 57.57% in value compared to the same period last year. (Read more)

Meanwhile, the growth of real estate also remains strong paralleled with the growth trend of the construction sector, the report noted.