Cambodia’s economic growth is forecast to continue at a healthy seven percent for 2017-2018, according to a United Nations report released yesterday.
Strong exports by the garment and agriculture industries were at the heart of the rosy outlook in the report published by UN’s Economic and Social Commission for Asia and the Pacific (UN-ESCAP), which said Cambodia’s growth would remain “rapid” at between 7.1 to 7.2 percent.
However its report, the Economic and Social Survey of Asia and the Pacific 2017, warned that authorities needed to exert robust governance for this strong performance to be maintained.
“The strong economic situation is again due to ready-made garments, which account for about 80 percent of the country’s total exports, rising numbers of tourist arrivals, a steady increase in foreign investment, higher consumer spending due to an increase in minimum wage for workers in the garment industry, and a decline in poverty,” the report stated.
Oliver Paddison of UN-ESCAP, said the government had a key role to play in ensuring continued stable economic growth. “Governance is important to ensure transparency and accountability, which in turn eliminates corruption in social and public affairs,” he said.
Ly Thuch, president of the government’s National Committee for ESCAP, welcomed the report, saying it offered an encouraging outlook and useful comments for the government to consider. “The report offers a choice of policies to reduce the risk of problems and recommendations to reach a successful outcome,” he said.
“It also shows the measures we need to implement to strengthen the quality of economic growth for our sustainable development. What we have found in the report and its recommendations will be used by the government in implementing reforms.”
The report also called for more diversity by exporters due to their current focus on the European Union, where Brexit and the EU’s ongoing economic instability could endanger Cambodian businesses. So far, said the report, there was no indication of exporters being harmed by the uncertain outlook in many European countries.
Chhun Dalin, deputy director of macroeconomic and fiscal public finance policy at the Ministry of Economy and Finance, said: “If we look at the growth rates predicted here, it seems unlikely that Cambodia exporters are yet being harmed by their focus on Europe. After this period, however, Cambodia has to think more about market diversification.”
The Asian Development Bank in its annual economic publication, Asian Development Outlook 2017, stated that that Cambodia’s exports are expected to expand by 11.0 percent this year, outpacing import growth at 9.0 percent while tourism revenues should remain strong this year and next year.