PHNOM PENH, Jan 29 (NNN-AKP) – Cambodia’s economy is projected to remain robust in 2020, despite stronger external headwinds, the Singapore-based ASEAN+3 Macroeconomic Research Office (AMRO) said.
“Real GDP (gross domestic product) growth is forecast to moderate to a more sustainable rate of 7.1 percent in 2019 and 2020, supported by robust construction activities, strong domestic credit growth, and buoyant domestic demand,” the press release said.
Inflation is expected to rise to 2.3 percent this year, slightly up from 2.1 percent last year, it said.
Cambodia’s major external vulnerabilities will stem from its high reliance on a few markets, particularly the European market, the press release said.
AMRO said, if the European Union (EU) suspends the Everything but Arm (EBA) trade scheme from Cambodia, the country’s exports will be adversely affected.
The EU started in Feb last year, the 18-month process that could lead to the temporary suspension of Cambodia’s duty-free trading access to the EU market, under the EBA scheme, due to concerns over human rights and labour rights issues.
A final decision on whether to withdraw the trade privilege from Cambodia or not will be made in Feb.
As a Least Developed Country, Cambodia has, for decades, enjoyed exports of all products, except arms and ammunition, to the EU markets duty-free.
The country’s export to the EU was valued at 5.86 billion U.S. dollars in 2018, about 95 percent of which entered the EU duty-free, taking advantage of the EBA preferences, an EU data showed, adding that garment and footwear products accounted for around three- quarters of the EU imports from the kingdom.
The garment and footwear industry is Cambodia’s biggest export sector, employing about 750,000 people in some 1,100 factories.– NNN-AKP
