PHNOM PENH, Nov. 22 (Xinhua) -- Cambodia's economic growth is projected to reach 5.4 percent in 2023, marginally down from the 5.5 percent forecast in May, the World Bank said on Wednesday.
The Southeast Asian country's economic growth is expected to pick up to 5.8 percent in 2024 and 6.1 percent in 2025, on anticipated increases in infrastructure investment and benefits from regional trade agreements, said the bank's semi-annual outlook for Cambodia.
"To sustain economic growth, Cambodia needs to support the private sector as the engine of growth, and this can be achieved by prompt actions to improve public sector performance," World Bank country manager for Cambodia Maryam Salim said at the launch of the report in Phnom Penh.
"Maintaining financial stability is also a priority and more efforts are needed to restore fiscal space," she added.
Despite major investments in public infrastructure, the country's limited transport and logistics capacity and unreliable energy supply continue to impose high costs on business and consumers, the report said.
In the short term, overlapping negative shocks from the pandemic, the Russia-Ukraine conflict, and high international interest rates are expected to continue to constrain growth, it added.
The report said tourism is crucial to Cambodia's economy, and while international tourists are returning, receipts at major destinations are well below pre-pandemic levels.
Investment in merchandise manufacturing, including of garments, and exports of finished goods have both weakened, reflecting lower global demand, it said, adding that as a result, manufacturing jobs have dropped by 5 percent.
"Looking ahead, economic growth could further be affected by weakening global demand or renewed oil and food price shocks," the report said. "Domestically, rising household debt and domestic credit in the real estate sector remain risks."
The report said improving business environment to boost productivity and competitiveness, upgrading infrastructure and connectivity, and upgrading workforce skills could help Cambodia foster a more sustainable, productivity-led pattern of growth. ■
