Cambodia's GDP Soars to 6.3%, Exceeding Earlier Projections
At the current rate being recorded by the World Bank, the Kingdom is set to hit 6.3% gross domestic product (GDP) growth this year, surpassing all previous projections made by the WB, the International Monetary Fund, and the Asia Development Bank.
The new forecasted figure was laid out by Standard & Poor (S&P), a global rating agency that prides itself on a comprehensive understanding of both nuances worldwide and the broader perspective.
S&P’s Global Banking Outlook Midyear 2022 also declared economic recovery for the country, in reference to the covid-19 crisis which dropped Cambodia’s GDP to -3.1% in 2020 after reaching 7.5% and 7.1% in 2018 and 2019, respectively.
WB Country Manager for Cambodia, Maryam Salim, had lauded last month the government’s insistence on “living with covid-19,” which allowed the Kingdom to reopen and enable this recovery instead of being overcome by lockdowns, more restrictions, and further economic paralysis.
Salim nevertheless pointed out the continued need for the government’s cash transfer program as the poor in the country continue to be burdened by the Russia-Ukraine war, which has been spurring rising energy and food prices in various parts of the world.
Much of Cambodia’s economic survival stems from its control of covid-19, with almost 94.5% of the population already inoculated as of July 20, 2022. This includes people aged three (3) and up.
The aggressive vaccination drives were followed by the gradual lifting of health regulations, which allowed the tourism sector to recover positively as the number of international visitors steadily increases.
Despite a slow pace, the agricultural sector has also been growing and helping to ease food prices and thus support the Kingdom’s economic growth. Likewise, export-oriented products in manufacturing have continued to grow while simultaneously serving the domestic market.
Even the real estate industry was quick to mitigate losses, such as IPS Cambodia which incentivized property owners and seekers who chose to stay amid the pandemic and decided to offer additional services such as property consultation.
The National Bank of Cambodia (NBC) also imposed monetary policies such as maintaining the exchange rate in order to protect the purchasing power of the Riel currency, as well as the income of vulnerable people, said Chea Chanto, NBC governor.
Ivan Tan, primary credit analyst at S&P, also pointed out Cambodia’s competitive cost structure and relatively young working population as contributors to keeping the country’s long-term growth story intact despite recent crises and felt impacts of the pandemic.
The Kingdom thus remains one of the fastest-growing economies in the world, most notably against the backdrop of the covid-19 standstill. If the 6.3% rate is achieved this year, the GDP will only need to increase by 12% to return to pre-pandemic levels.