Mekong Memo Cambodia 20230925
Mekong Memo Cambodia Weekly, September 25, 2023: Business, politics, finance, trade & legal news.
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Here is your Mekong Memo Cambodia for the week of September 25, 2023.
ADB Tweaks Economic Growth Predictions
The Asian Development Bank (ADB) has revised Cambodia's GDP growth projection for 2023 down to 5.3% from 5.5%. This adjustment comes in light of an 18.6% drop in exports of garments, footwear, and travel goods in the first half of the year. However, a 22.9% increase in other manufactures exports, such as vehicle parts and solar panels, partly counteracted this decline. Despite challenges in the agricultural sector, the service sector, particularly tourism, has shown robust recovery, exceeding expectations. The report also highlighted a threefold rise in gold exports and a 4.1% increase in foreign direct investment.
Read more: Khmer Times
FDI Soars, Defying Global Financial Challenges
Despite a global financial downturn, Cambodia witnessed a 41.6% surge in foreign direct investment (FDI) in the first half of 2023, a significant leap from the 0.4% increase in 2022. This growth is expected to boost the agricultural sector by 0.9% and the hotel and restaurant sub-sectors by 41.5%. Notably, the non-garment manufacturing sub-sector, driven by solar panel exports to the US, saw investment rise by 172%. Factors such as strategic geographical location, investment law reforms, and beneficial trade agreements position Cambodia as an attractive investment hub.
Read more: Phnom Penh Post
Hurdles Loom for Economic Recovery
The ASEAN+3 Macroeconomic Research Office (AMRO) cautions that Cambodia's economic resurgence is at risk from external challenges, including China's slowing growth and a prolonged downturn in Cambodia's real estate sector. While AMRO predicts a GDP growth of 5.3% for 2023, it highlights potential threats such as global oil and food price surges and domestic real estate challenges. Despite these concerns, robust tourism recovery and strong domestic consumption are positive indicators. AMRO emphasizes the need for fiscal and structural reforms to bolster long-term growth.
Read more: KiriPost