World Bank predicts growth for Kingdom

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A high-rise buildings in Phnom Penh Capital. Sreng Meng Srun

The World Bank’s economic report on East Asia and Pacific says the Cambodian economy is expected to grow at seven per cent this year, compared to 6.9 per cent last year.

The result is underpinned by upbeat investor sentiment and rising government spending, it said in its report released on Thursday.

 

“As global demand peaks this year, growth in Cambodia is expected to remain robust, easing modestly to 6.8 per cent next year and in 2020."

“Strong economic growth is expected to result in continued poverty reduction,” the World Bank said.

 

The Asian Development Bank issued a report late last month, predicting the Cambodian economy would grow seven per cent this year and next, while the International Monetary Fund projected early this week that the economy will expand 7.25 per cent this year.

The World Bank said that the export of garments, footwear, and travel goods increased 16 per cent in the first half of this year while the import of raw materials used in the garment industry grew 37 per cent during the same period.

However, the World Bank report raised some challenges and risks that Cambodia may face and which may affect economic growth.

The World Bank said to sustain rapid growth and to reduce excessive dependence on external capital, Cambodia would need to boost domestic savings and investment through the diversification of financial products, the development of domestic debt market and the strengthening of public-investment management practices.