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World Bank Report: Cambodia’s Economy Recovers But may face more obstacles

In its December 2022 Cambodia Economic Update, the World Bank forecasts that Cambodia will have a 4.8 percent economic growth rate by 2022, with the post-epidemic economic recovery accelerating in part due to the recovery of tourism.

Cambodia’s garment and footwear export industry has maintained its tenacity. The services sector, especially travel and tourism, is doing well after the government introduced a strategy. “Live with Covid 19” by the end of 2021, and the total number of international arrivals reached 1.2 million in the first nine months of 2022. Business and consumer confidence has been accompanied by an increase in domestic and foreign investment.

Economic growth is projected to grow by 5.2 percent by 2023, as rising employment will further boost domestic consumption accompanied by a slowdown in inflation.

Cambodia has a small economy that is open to foreign trade and foreign investment.

And the outlook for global growth remains bleak. Global trade growth slowed in the second half of 2022 and is projected to slow sharply in 2023. The economies of developing countries such as Cambodia are particularly vulnerable, especially as inflation rises, global economic growth slows, energy supplies fall, and interest rates rise.

To protect its economy from the impact of declining demand abroad, Cambodia should take steps to strengthen its financial position and boost its economy, said World Bank Country Director for Myanmar Cambodia, and Laos. The district, especially its attractive tourism industry for the world.

“Revenues have increased due to the economic recovery and the improvement in the sector,” she said. Administration. Expanding the tax base will help ensure the resources needed to boost Cambodia’s economy and withstand the economic downturn in major trading partners. Tourism and hospitality are potential segments for future growth.

In the long run, Cambodia’s economy is expected to continue to grow at around 6 percent as international and domestic tourism become stronger. Cambodia’s participation in the recently signed trade agreement could also boost agriculture and the agricultural processing industry to gain more momentum.