PHNOM PENH, May 18 (Xinhua) -- The World Bank on Thursday raised its growth forecast for Cambodia to 5.5 percent in 2023, up from its earlier projection of 5.2 percent.
"Driven by pent-up consumer demand and the return of foreign tourists, the overall contribution of the services sector to economic growth is returning to the 2019 levels," Maryam Salim, World Bank country manager for Cambodia, said during the launch of the May 2023 Cambodia Economic Update.
"Meanwhile, the agriculture sector is benefitting from improved access to regional markets, thanks to newly ratified bilateral and regional free trade agreements," she added.
The Regional Comprehensive Economic Partnership agreement, the Cambodia-China Free Trade Agreement (FTA) and the Cambodia-South Korea FTA, as well as China's reopening earlier this year, have given a boost to the kingdom's economic growth.
World Bank senior country economist Ly Sodeth said Cambodia's economic recovery strengthened despite weakening global demand.
"Initially led by export-oriented manufacturing, growth drivers have evolved to the services and the agriculture sectors," he said at the event.
He said the kingdom's inflation had returned to the pre-COVID-19 pandemic levels, at 2.2 percent in February this year as food and oil prices moderated.
Meanwhile, Sodeth said interest rate increases in the United States have pushed up domestic interest rates, curtailing the kingdom's credit growth.
"Domestic credit decelerated sharply, growing at 14.8 percent year-on-year, a 13-year low in February 2023, well below the 22 percent growth rate recorded during the same period in 2022," he said. ■