IMF forecasts 5.5% economic growth in Cambodia in 2024

The International Monetary Fund (IMF) has forecast that Cambodia's economy will grow by 5.5 percent by 2024, up from 5 percent by 2023, driven by a strong recovery in agricultural garment exports and the recovery of the tourism sector.

Kenichiro Kashiwase, IMF Mission Chief to Cambodia, said at the end of his visit to Cambodia from 17 to 30 September that “however, the construction and real estate sectors are undergoing a series of adjustments after there was rapid growth last year.”

He said credit growth had slowed sharply as asset quality deteriorated and private sector debt rose. He added that in the first quarter of 2024, non-performing loans (NPLs) accounted for 6 percent of total loans, reflecting emerging vulnerabilities with the post-Covid-19 strict rules.

Kashiwase said the risks to the outlook shifted to a downturn, especially due to weaker-than-expected demand from developed economies, geopolitical warming, and high domestic private debt.

"Rising NPLs in tourism and real estate also pose risks to growth and financial stability. Conversely, continued easing of global financial conditions will support the recovery," he added.

“Inflation slowed to an average of 1.6 percent in the first half of 2024, down from 2.1 percent in 2023, reflecting global commodity price trends and weak domestic demand growth. For the whole year, inflation is projected to rise to around 1.5 percent before reaching a long-term trend of 3 percent,” Kashiwase continued.

It should be informed that the Asian Development Bank (ADB) recently maintained its economic growth forecast for Cambodia at 5.8% for 2024 and 6.0% for 2025.