12/10/2023 (Cambodia) - Cambodia's economic prospects are shining bright as the International Monetary Fund (IMF) predicts it to be the quickest-growing economy within the Association of Southeast Asian Nations (ASEAN) for 2023-24. According to the World Economic Outlook issued on October 10th, the IMF anticipates Cambodia's real GDP to rise by 5.6% in 2023 and 6.1% in 2024, a notable leap from the 5.2% observed in 2022.
This trajectory places Cambodia at the forefront of economic growth in the 10-nation ASEAN bloc for two successive years. Significantly, under the Regional Comprehensive Economic Partnership (RCEP), Cambodia reported exports worth $5.26 billion to fellow member states in the initial eight months of 2023, marking a 22% increment from the previous year.
The Philippines closely trails Cambodia with a projected economic growth of 5.3% in 2023 and 5.9% in 2024. Concurrently, Indonesia and Laos are projected to witness a steady 5% and 4% growth, respectively, for both years. Vietnam and Malaysia anticipate 5.8% & 4.3% and 4.7% & 4% growth in 2023 and 2024. Thailand and Singapore have predictions set at 3.2% & 2.1% and 2.7% & 1%, respectively, over the two years. Brunei, however, is expected to see a 0.8% economic contraction in 2023, though it's projected to bounce back with 3.5% growth in 2024.
According to Thong Mengdavid, a scholar at Phnom Penh's Asian Vision Institute, Cambodia's ascent can be credited to the resurgence of export-centric sectors, including the garment industry. “The recovery of export-oriented manufacturing sectors such as the garment industry … is a crucial contributor to Cambodia’s economic growth in the post-pandemic era,” remarked Mengdavid in an interaction with China Daily.
Furthermore, the implementation of RCEP and the Cambodia-China free trade accord have bolstered bilateral and regional commerce, simultaneously enhancing the competitiveness of Cambodia's agricultural exports. Both trade agreements have been operational since January 2022.
Although Cambodia's exports reached $16.94 billion in the first three-quarters of 2023, marking a minor decline of 0.8% year-on-year, the country observed an 18.3% surge in exports to China during this period.
Mengdavid emphasized other economic accelerators, including the surge in global tourists and proficient fiscal management by the Cambodian government. Highlighting the IMF's insights on ASEAN nations, he stated, “The IMF evaluation on ASEAN countries reflects the reality of ASEAN challenges,” urging ASEAN countries to use this analysis to bolster cooperation for sustainable and inclusive growth.
On a broader spectrum, the IMF's forecast for global economic growth has been set at a modest 3% for 2023 and 2.9% for 2024, descending from the 3.5% seen in 2022. “The global economy is limping along, not sprinting,” opined Pierre-Olivier Gourinchas, an IMF economist. Gourinchas also stressed the value of global collaboration to attain improved growth, urging nations to adhere to World Trade Organization guidelines.