The Asian Development Bank (ADB) maintained its economic growth forecast for Cambodia at 5.3% in 2022 but lowered the 2023 forecast to 6.2% from 6.5% due to weaker global growth.
According to the Asian Development Outlook (ADO) 2022 Update, released today, Cambodia’s garments, travel goods, and footwear outputs remained robust, registering 39.8% year-on-year growth in the first half of 2022, despite the economic slowdown in the United States and Europe. The non-garment manufacturing sector continued its strong growth momentum. Construction gradually recovered, with imports of construction materials rising 22.8%. Industry output is projected to grow 9.1% this year, before moderating to 8.6% in 2023 because of weaker external demand.
“An increase in Cambodia’s manufactured product exports, and a gradual recovery in the construction and service sectors, have supported economic growth in 2022 despite the drop in agricultural growth caused by surging fuel and fertilizer prices and heavy rains,” said ADB Country Director for Cambodia Jyotsana Varma. “The government’s socioeconomic interventions such as the Cash Transfer Program for Poor and Vulnerable Households have been effective in lessening the impacts of the global surges in commodity prices on the poor.”
The report revises Cambodia’s 2022 inflation forecast to 5.0%, from the 4.7% forecast in April, due to the strong pass-through effects of fuel price increases caused by the Russian invasion of Ukraine. The inflation forecast for 2023 was kept at 2.2%.
Risks to the outlook include the potential emergence of new and more deadly COVID-19 variants, the monkeypox outbreak, a rapid increase in nonperforming loans, the weakened growth of major trading partners, global supply chain disruptions, and a worse-than-expected surge in energy and commodity prices.
ADB’s support to Cambodia is well aligned with the government’s growth priorities. Currently, the bank is implementing $2.43 billion in investment projects in Cambodia. In 2021, ADB committed $327.1 million in sovereign loans and grants and catalyzed an additional $5 million through co-financing for Cambodia. ADB’s lending pipeline for 2022–2025 includes $1.17 billion of concessional lending and $43.9 million in grants to support the country’s economic development and recovery from the COVID-19 pandemic.
