Cambodia to see region's fastest growth

Cambodia's economy is forecast to be the fastest-growing in the Association of Southeast Asian Nations, according to the latest outlook by the International Monetary Fund backed by analysts.

In the World Economic Outlook published on Tuesday, the IMF projected that Cambodia's real GDP will grow 5.6 percent this year and 6.1 percent next year, up from the 5.2 percent growth recorded last year.

This means the kingdom is likely to become the fastest-growing economy in the 10-nation bloc for two consecutive years.

Cambodia's growth was closely followed by the Philippines, whose economy is expected to grow 5.3 percent this year and 5.9 percent next year.

Indonesia's economy is estimated to grow 5 percent in both 2023 and 2024, while the Lao economy is projected at 4 percent for both years. Growth in Myanmar is expected to be stable for 2023 and 2024 at 2.6 percent.

Vietnam is expected to grow by 4.7 percent this year and 5.8 percent next year, while the predicted growth for Malaysia is 4 and 4.3 percent, respectively.

Thailand's economy is expected to grow 2.7 percent this year and 3.2 percent next year.

Singapore's economic growth will slow to 1 percent this year, down from 3.6 percent last year, but will rebound slightly to 2.1 percent next year.

Brunei's economy is expected to contract by 0.8 percent this year, an improvement from its 1.6 percent contraction last year, but it is still set to be the worst-performing country among ASEAN members. The IMF expects Brunei to regain its growth momentum to 3.5 percent next year.

Several reasons are behind Cambodia's economic growth, said Thong Mengdavid, a research fellow at the think tank Asian Vision Institute in Phnom Penh.

"The recovery of export-oriented manufacturing sectors such as the garment industry … is a crucial contributor to Cambodia's economic growth in the post-pandemic era," Mengdavid said.

The full implementation of the Regional Comprehensive Economic Partnership and the Cambodia-China free trade agreement also improves competitiveness and encourages bilateral and regional trade, as well as investment diversification of Cambodia's agricultural goods, Mengdavid added.

Both the RCEP and the free trade agreement have been in effect since January last year.

Cambodia exported $16.94 billion worth of goods in the first nine months of this year, a slight year-on-year drop of 0.8 percent from $17.07 billion, Xinhua News Agency reported, citing data released by the kingdom's General Department of Customs and Excise.

The kingdom's exports to China increased by 18.3 percent between January and September.

Under the RCEP, Cambodia exported $5.26 billion worth of goods to other member countries in the first eight months of this year, up 22 percent from last year, another report by the Ministry of Commerce showed.

Other key economic drivers include the influx of international visitors and the government's effective revenue administration and fiscal management, Mengdavid said.

"The IMF evaluation on ASEAN countries reflects the reality of ASEAN challenges," said Mengdavid, noting it can be used as the basis for ASEAN countries and institutions to further enhance cooperation to build resilient, sustainable, and inclusive growth.