NBC: Cambodia's economy to grow at around 6.4% by 2024 despite global uncertainty

Phnom Penh: The Cambodian economy is optimistic that it will continue to grow at around 6.4% in 2024, mainly supported by the growth of tourism and manufacturing. This is according to the National Bank of Cambodia's Macroeconomic and Banking Report 2023 and 2024 Outlook. The report said that the tourism sector is expected to recover due to the improvement of the tourism situation in the region as well as the continued development and improvement of infrastructure that will support the sector. Through the implementation of the new investment law, the manufacturing sector is expected to achieve better growth than 2023, especially non-garment manufacturing products, and the garment sector is expected to grow steadily.

The agricultural sector is projected to grow slightly higher than 2023, benefiting from continued market diversification to members of the Regional Comprehensive Economic Partnership Agreement (RCEP) and bilateral free trade agreements, coupled with the government's support policy to boost production and markets.

The construction and real estate sectors affected by the recent crisis are projected to continue to grow slowly, which will continue to be supported by public infrastructure development projects, coupled with a slow recovery in domestic demand focused on Affordable housing at a time when demand for luxury construction catering to residents is expected to remain weak.

Inflation in 2024 is projected to be 2.5% slightly higher than in 2023, mainly due to expectations that global oil prices may rise after oil exporters plan to cut supplies. .

Along with optimistic forecasts for economic growth this year, the National Bank of Cambodia has also warned of several risks that could adversely affect the Cambodian economy, including external factors: Lower-than-expected growth in Cambodia's major trading partners, such as China, the United States and Europe, could hurt investment, export and tourism flows, monetary policy normalization of major developed countries is slower than expected, which could put pressure on foreign borrowing and interest rates in Cambodia, Rising tensions and global geopolitical divisions could disrupt supply chains and hamper growth in exports and investment.

Climate change, which is slowing down the agricultural sector, especially El Niño, which is projected to have a greater impact than 2023, and the potential for cybercrime could affect public confidence in digital payments and the whole financial system.

Meanwhile, internal risks include: Increased non-performing loans may slow down credit growth for consumption and investment, and growth in the construction and real estate sectors may remain low and may have an impact on other sectors, such as banking. At the same time, Cambodia still faces major structural problems such as slow economic diversification and exports, limited capacity, skills, and productivity, high transportation, and electricity costs compared to competitors for export of Agriculture is vulnerable to climate change and dollarization remains high.

According to the National Bank of Cambodia, in 2023, the Cambodian economy is projected to continue to grow at a rate of 5.5%, slightly higher than the previous year (5.2%), mainly supported by tourism growth and non-garment manufacturing, despite low growth in the garment, construction, real estate and agriculture sectors.