The World Bank has predicted that Cambodia’s economy is expected to grow by 6.9 percent this year – the highest of the 14 East Asia and the Pacific region – but cautioned that several national and global risks could disrupt its prediction, according to The Phnom Penh Post Online on Friday (Apr 13).
“Our base projections here anticipate a certain set of conditions, and in Cambodia we are assuming the election will take place as planned and will not destabilize the economy said World Bank’s chief economist for East Asia and Pacific region SudhirShetty.
He noted that risks to those projections could arise in the near future and warned the rising tensions between the US and China could have a significant impact on economic growth across Southeast Asia if it led to tariffs on Chinese exports to the US.
The World Bank’s report pointed out several things that boosted Cambodia’s economic growth last year, including a rise in tourist arrivals and increased agricultural output due to favorable weather conditions.
The report, however, noted that growth in the garment industry slowed to 7.7 percent last year compared to 8.4 percent a year earlier. And while inflation and credit growth declined, credit to the construction and real estate sector increased rapidly – growing at 37.1 percent in November 17, up from 28.4 percent in May.
It identified threats associated with construction boom and the declining external competitiveness as the downside risks to the economic outlook.