Cambodia’s economic growth in 2022 is projected at 4.5 percent thanks to a strong domestic recovery by domestic economic activity and agricultural commodity exports, according to the World Bank’s East Asia and Pacific Economic Update.

Despite a general slowdown in global demand, growth is projected to hold up at 4.5 percent this year under baseline scenario, thanks to the rollback of mobility restriction made possible by Cambodia’s high vaccination rate, the report said.

The recovery is expected to remain underpinned by domestic economic activity and agricultural commodity exports.

“Traditional growth drivers, especially the garment, travel goods, footwear, and bicycle manufacturing industries, as well as agriculture, have fully recovered,” the report said.

Cambodia’s export-oriented manufacturing, however, is expected to face headwind in coming months with a less favorable external environment which is being reshaped by critical slowdown in the U.S and structural slowdown in China, the report read.

Over the medium term, the economy is expected to trend back to potential, growing at around 6 percent, the Update read.

“The new Law on Investment, the Cambodia-China and Cambodia-Republic of Korea free trade agreements and the Regional Comprehensive Economic Partnership are expected to help boost investment and trade in the coming years,” the report said.

RCEP is a mega trade pact between 10 ASEAN member states and its FTA partners, namely China, Japan, South Korea, Australia and New Zealand.

RCEP and the Cambodia-China FTA entered into force on Jan. 1, 2022, while the Cambodia-Republic of Korea FTA is expected to take effect in the near future.

Source: Agency Kampuchea Press

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