Economic Growth Predicted To Slow Slightly In 2020
Phnom Penh: The World Bank predicts that Cambodia’s economic growth will slow down by 0.2% next year.
The World Bank issued a report, indicating that Cambodia’s economic growth in 2019 remained at a strong 7% level. Exports remained strong throughout the year, and the construction industry remained active.
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In 2019, Cambodia’s GDP growth rate was higher than that of other ASEAN countries. GDP growth in Vietnam was 6.8%, Myanmar 6.6% while Laos saw 6.5%. Driven by garment exports and tourism, Cambodia’s economy has sustained growth between 1998 and 2018, making it one of the fastest-growing economies in the world.
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The report pointed out that in the first half of this year, the value of Cambodia’s newly approved projects increased (through foreign direct investment and domestic funds), and nearly 40% of foreign investment came from China. Tourism is still strong. In the first half of the year, the number of international tourists increased by 11.2%, of which nearly 40% were Chinese tourists.
Inflation is predicted to remain stable at 2.5%, behind Myanmar at 6.8%, Philippines at 3.8% and Vietnam at 3.5%, but behind Laos and Malaysia, both 2% and Thailand’s 1%.
However, due to global factors, the World Bank predicts that the Cambodian economy will slow down to 6.8% in 2020. Per capita GDP is also expected to fall by 0.2% to 4.2%.
Weak global demand, including from China, and increased uncertainty caused by continued trade tensions between Beijing and Washington will lead to a decline in global export and investment growth, posing a long-term threat to East Asia and the Pacific.
The decision on the European Union’s Everything But Arms tariff agreement could also potentially harm exports, especially in the garment industry.