AMRO Still Maintain 6.2% Growth Forecast for Cambodia's Economy

The ASEAN+3 Macroeconomic Research Office (AMRO) has maintained a 6.2 percent growth for Cambodia in the current year in its January 2024 Quarterly Update.

The Kingdom’s projected growth rate is the second highest in the region, trailing by a very low margin behind the Philippines, which is expected to clock 6.3 percent growth in the current year.

At 3.1 percent, Cambodia’s inflation is also set to remain within stable limits in 2024, according to the leading economic research and analysis organization.

At the same time, according to the circular of the Royal Government of Cambodia on the "Preparation of Strategic Budget Plan 2024-2026 and Draft Law on Financial Management 2024," Cambodia's economy is projected to achieve a growth rate of 6.6% in 2024 due to expectations of a recovery in external demand and investment confidence while domestic economic activity remains balanced.

According to the Ministry, Cambodia's economic growth in 2024 is supported by three main sectors: (First), the agricultural sector is expected to continue to achieve good growth of 1.1%, supported by the growth of sub-sectors of crop and livestock, while the fisheries sub-sector is expected to continue to recover slowly. (Second): the industrial sector is projected to continue to grow at around 8.5% due to the expected recovery of the garment sub-sector, while the non-garment manufacturing sub-sector continues to maintain strong growth while the construction sub-sector continues to grow at a slower pace than before the COVID-19 crisis, and (Third): the services sector is projected to continue to grow at a rate of 6.9%, with continued activity in the hotel and restaurant sub-sector and other supportive services, including the wholesale-retail sub-sector and the logistic and transportation sub-sector, as the real estate sub-sector is expected to continue to grow at a slower pace than normal.

Overall, Cambodia's economy in 2024 will be surrounded by risks and uncertainties caused by external factors, including: (1) Rising geopolitical, regional, and global tensions; (2) Global economic slowdown; (3) Longer-than-expected tightening of monetary policy, especially in the United States, and the appreciation of the US dollar, which could affect investment and trade flows; (4) The fragmentation of the global economy and trade that will affect international cooperation; and (5) Climate change and natural disasters.

In addition, the exchange rate is expected to be within a manageable range at an average annual rate of 4,065 riel per US dollar due to the intervention of the National Bank of Cambodia to maintain price stability and public confidence in Riel consumption.