PHNOM PENH, Apr 5 (NNN-AKP) – China’s optimisation of its anti-COVID-19 strategy and resumption of its outbound group tours earlier this year, will give a big boost to Cambodia’s tourism and economy, the Asian Development Bank (ADB) said, yesterday.
Cambodia’s economy is forecast to grow 5.5 percent in 2023, and six percent in 2024, on a more robust tourism recovery and higher growth in the service sector, the lender said in its report.
The country’s economy traditionally relies on tourism, garment, footwear and travel goods exports, construction and real estate, and agriculture.
ADB country director for Cambodia, Jyotsana Varma, said, despite weaker global demand, Cambodia’s economy has continued to perform well, led by ongoing tourism recovery.
“Cambodia’s economic outlook is positive with robust growth, shrinking current account deficit and moderate inflation in 2023,” she said.
The outlook report said, service growth will continue to be driven by ongoing tourism recovery, saying that, growth in services is forecast to accelerate to 7.3 percent in 2023, before easing to 6.8 percent in 2024.
It will be led by even stronger tourism growth expected, following the loosening of COVID-19 restrictions in China, Cambodia’s largest tourist market, the report said.
Other expected boosts to services this year are Cambodia’s hosting of the 32nd Southeast Asian Games in May and the 12th ASEAN Para Games in June, as well as, the national election in July, it added.
Inflationary pressure is anticipated to moderate at an average rate of three percent in 2023, and four percent in 2024, the report said, adding that, Cambodia’s economic outlook also hinges on the country’s continuing efforts to scale up green investment, to unlock long-term growth potential.
Growth in exports of garments, footwear and travel goods is projected to decelerate due to weak external demand in the United States and Europe, the main export destinations, the report said.
The industrial sector, however, continues to benefit from policy reforms, including the investment law 2021, which created a one-stop service for investors, and new trade agreements, it added.
Industrial output is expected to grow 5.8 percent in 2023, before accelerating to 7.8 percent in 2024, the report said, adding that, growth in construction is expected to remain slow, as agriculture is forecast to grow 1.1 percent this year and 1.2 percent in 2024, boosted by crop production for exports.
Risks to the outlook include weaker growth in the United States and Europe, high level of private debt, less-than-expected growth of tourist arrivals, high energy prices, and extreme weather events affecting agriculture productivity, Varma said.
Cambodian Tourism Minister, Thong Khon, said, the kingdom is expected to attract four million international tourists this year, after China optimised its anti-COVID-19 strategy and resumed its outbound group tours earlier this year.
“This year, we hope to attract between 800,000 and one million Chinese tourists,” he said, noting that, the kingdom received only 106,875 Chinese tourists in 2022.
Chhay Sivlin, president of the Cambodia Association of Travel Agents, said, the return of Chinese tourists had given “high hopes” for the kingdom’s tourism and economic growth in the post-COVID-19 pandemic era.
“I believe that the famed Angkor archaeological park in Siem Reap and coastal areas in Sihanoukville will remain the most attractive destinations for Chinese tourists,” she said.– NNN-AKP
