Cambodia's construction and real estate sectors are expected to continue experiencing slower growth. - PPP
PHNOM PENH (Xinhua): Cambodia's economy is projected to grow around six per cent in 2023, up from 5.1 per cent in 2022, driven by garment exports, tourism, agriculture, and construction and real estate, according to a National Bank of Cambodia's outlook on Thursday (Jan 12).
"This projected growth rate is supported by an expected 6.9 per cent increase in the garment sector and 14.3 per cent rise in non-garment manufacturing products," the report said.
"The tourism sector is estimated to grow by 18.5 per cent due to an increase in local tourists and international tourist arrivals as flight operations from China to Cambodia have been gradually resumed," it added.
The agricultural sector is forecast to increase by 1.1 per cent on the back of the implementation of the Regional Comprehensive Economic Partnership agreement (RCEP) and the bilateral Free Trade Agreements (FTAs), as well as the withdrawal of the tariff preference for the import of rice to European markets, the report said.
"However, the construction and real estate sectors are expected to continue experiencing slower growth, at 1.7 per cent and 1.2 per cent respectively," it said.
The report underlined that as inflation remains high, the US Federal Reserve is likely to continue increasing the federal fund rate, which could further tighten international financial conditions, causing a further appreciation of the US dollar, and putting more pressure on other currencies and international reserves of emerging economies.
"Given the high dollarization, the appreciation of the US dollar will also raise the prices of Cambodia's exported goods, which is another potential challenge that Cambodia will face," the report said.
