PHNOM PENH, Dec. 7 (Xinhua) -- Cambodia's economy is recovering well from the influence of COVID-19 pandemic with the growth being forecast at 4.8 percent in 2022 and 5.2 percent in 2023, the World Bank said in a report released on Wednesday.
In its Cambodia Economic Update, the lender said the post-pandemic economic recovery has expanded thanks to a rebound in tourism, as the garment industry, travel goods and footwear exports have been resilient.
"The services sector, especially travel and tourism, has done well since the introduction of the 'Living with COVID-19' strategy in late 2021, and total international visitor arrivals have steadily increased, reaching 1.2 million in the first nine months of 2022," the report said.
"Business and consumer confidence have risen and both domestic and foreign investment have increased," it added.
However, prospects for faster growth face serious risks due to developments beyond Cambodia's borders, the report warned.
Cambodia has a small economy that is open to outside trade and investment, and the global growth outlook is gloomy, it said, adding that global trade growth slowed in the second half of 2022 and is projected to slow sharply in 2023.
"The economies of developing countries such as Cambodia are particularly vulnerable to rising inflation, slower global economic growth, decreased availability of energy supplies, and higher interest rates," the report said.
"Cambodia's manufacturing sector depends on export markets to thrive and would be negatively affected by an extended growth slowdown in its two largest export markets, the United States and the European Union," it added.
Speaking at the launch of the report, Mariam Sherman, World Bank country director for Cambodia, Myanmar and Laos, said to shield its economy from a possible drop in external demand, Cambodia could take steps to strengthen its fiscal position and promote its domestic economy, particular its globally attractive tourism industry.
"Revenues are up, thanks to the economic recovery and administration improvements," Sherman said. "Broadening the tax base will help ensure the resources needed to promote Cambodia's economy and weather slowing growth among major trading partners."
She added that tourism and hospitality are particularly promising areas for growth.
Looking farther into the future, Cambodia's economy is expected to advance to a growth rate of around 6 percent, as international and domestic tourism adds strength, the report said.
"Participation in recently concluded trade agreements can boost agriculture and agro-processing industries," it said, referring to the Regional Comprehensive Economic Partnership (RCEP) and the Cambodia-China Free Trade Agreement (CCFTA). ■