Cambodia's economy is expected to remain strong over the next two years, driven by solid garment and footwear exports, construction and real estate activities, rising government expenditure and a moderate recovery in agricultural, according to the Asian Development Bank's Asian Development Outlook 2017 (ADO).
The country's gross domestic product (GDP) is expected to increase to 7.1 percent in 2017 and 2018-slightly higher than an estimated 7.0 percent in 2016, it underlined.
"While the short-term economic growth outlook for the Cambodian economy remains strong, labour costs and skills shortages are increasing," said Mr. Samiuela Tukuafu, ADB Country Director for Cambodia.
Speeding up implementation of the Industrial Development Policy 2015-2025 will lower the cost of doing business and improve productivity growth and competitiveness through regulatory reform, and investments in infrastructure, logistics and a broader range of skills, he added.
The Growth in industry is projected at a slightly higher rate of 10.8 percent this year, supported by higher growth in major industrial countries and some diversification into products with higher value added such as garments, footwear, light manufacturing and electronics. The service sector is expected to expand by 6.7 percent, driven by buoyant domestic demand and tourism. Agriculture is projected to grow by 1.8 percent, assuming favorable weather. Growth in construction is expected to moderate.
The fiscal deficit, excluding grants, is estimated to increase to 4.3 percent of GDP this year due to higher public expenditure. Higher international prices for oil and other commodities are expected to step up inflation to 3.4 percent this year, from 3.0 percent in 2016. The current account deficit excluding official transfers, is estimated to further narrow to 9.4 percent of GDP in 2017 from 10.1 percent of the GDP last year in line with strong exports and low oil prices
Source: Agency Kampuchea Press