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Trade: Canada/US Down, Indonesia Up; RCEP Key
Cambodia's trade with Canada experienced a downturn in the first three quarters of 2023, with a 22% decrease compared to the same period in 2022, totaling over $756 million. Trade to the US was down about 2.1% from 2022 but market participants are still optimistic about prospects in the market. Despite this North American slump, overall exports remained strong. Cambodia-Indonesia trade relations are booming, with Indonesia now Cambodia's 6th largest trading partner. The surge in trade, reaching $862 million by October 2023, appears to be on track for a yearly volume of $1 billion.
Meanwhile, the RCEP (Regional Comprehensive Economic Partnership), encompassing 15 Asia-Pacific nations, has boosted Cambodia's exports, particularly in agriculture and industry. With $5.81 billion in exports to RCEP countries in 2023's first nine months, a 23.6% increase from the previous year, the free trade agreement seems to be treating the Kingdom well.
Growth Remains on Track
Cambodia is maintaining a stable economic growth forecast, with PM Hun Manet announcing a 5.6% growth rate for 2023 and an increase to 6.6% in 2024. This growth is expected to be driven by garment exports, tourism, agriculture, and construction. The country continues to target a transition from a least developed country by 2027, focusing on diversifying its economy and expanding export markets, especially in the ASEAN+3 region. The World Bank's outlook aligns with this, projecting a 5.4% growth in 2023, rising to 5.8% in 2024, despite global economic pressures and internal challenges like limited transport and energy infrastructure.
Coal Conundrum: Delayed Projects and Environmental Dilemmas
Ambitious coal power projects are facing delays and uncertainty. The Han Seng plant in Oddar Meanchey, part of a push towards fossil fuels in 2020, is now idle with paused construction and no clear completion timeline. Another project in Koh Kong by Royal Group hasn't started, and is roiled by evictions and environmental concerns. Meanwhile, the operational CIIDG plant in Sihanoukville is raising health fears among locals, challenging Cambodia's energy strategy, as the government tries to balance the complexities of economic growth, energy security, and environmental sustainability in the face of a global shift away from coal.
Read more: Japan Times
Golden Milestone: Nearly 9 Tons Extracted
Since June 2021, Cambodia has produced approximately 9 tons of gold, yielding over $14 million in royalties to the national purse. The country's foray into commercial gold mining has involved six companies, with Renaissance Minerals, a subsidiary of Emerald Resources NL, standing out for high yields in Mondulkiri province.
Read more: China.org.cn
Diplomatic Roundup: Netherlands, Antigua & Barbuda, Saudi
The Kingdom held its first Bilateral Consultations with the Netherlands, focusing on boosting trade, sustainable development, and people-to-people connectivity. Cambodia and Antigua and Barbuda are exploring potential trade in commodities like rice and cashew nuts, and cooperation in tourism and agriculture. Saudi Arabia announced the establishment of a new embassy in Cambodia next year, reflecting increased Saudi interest in the region after restoring diplomatic ties with Thailand early this year.
Inbound Air Passengers Up 144%
Cambodia saw a surge in air travel with 4.11 million passengers in the first ten months of 2023, marking a 144% increase year-on-year. The country's air traffic was composed of 41,596 flights by 32 airlines to three international airports, a 93% rise in flights from the previous year. The growth is a result of expanding air connections, including direct flights to eight ASEAN countries, China, South Korea, and Qatar.