Mekong Memo Cambodia Weekly, October 16, 2023: Business, politics, finance, trade & legal news.
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Here is your Mekong Memo Cambodia for the week of October 16, 2023.
A Rising Star in ASEAN's Economic Sky
Cambodia is set to be the fastest-growing economy in the Association of Southeast Asian Nations (ASEAN) for two consecutive years, with a projected GDP growth of 5.6% this year and 6.1% in 2024. This growth is attributed to the recovery of export-oriented sectors, effective trade agreements, and an increase in international visitors. Notably, the Regional Comprehensive Economic Partnership and the Cambodia-China free trade agreement have significantly boosted Cambodia's competitiveness and trade.
Phnom Penh Faces Retail Challenges
Throughout 2023, Phnom Penh's retail sector faced stagnation, largely attributed to the sluggish global economic environment. Over 650,000sqm of retail space remained unoccupied from the beginning of the year to Q3. CBRE Cambodia's research indicated a nearly 3% decline in occupancy rates from the previous quarter. Notably, there were no new retail space launches or completions in Q3. The trend has shifted towards standalone high street locations, with prime locations witnessing a 13% rate increase. Meanwhile, the average rent for various retail spaces saw a decline.
Read more: Phnom Penh Post
Exports Take a Yearly Dip
Cambodia reported a significant decline in bicycle exports, amounting to $424 million in the first three quarters of 2023, marking a 42.8% drop compared to the previous year. Despite the setback, bicycles remain one of Cambodia's primary export products. The country houses five major bicycle factories, primarily located in special economic zones in Svay Rieng Province's Bavet City, bordering Vietnam. Garment exports were down 17.8%, footwear saw a drop of 25% and travel goods were down 13.4%. The Ministry of Commerce attributed this decrease to the global economic slowdown and uncertainties, leading to reduced purchase orders.
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