Cambodia Economic Forecast

GDP increased robustly in 2022, and growth has likely remained healthy so far this year. In January-September, traveler numbers rose by around 211% year on year. This, coupled with lower inflation in January–August, should have underpinned growth in the services sector and boosted consumer spending. That said, merchandise imports fell 5.9% year on year in the first nine months of the year, while merchandise exports dropped 0.8% in the same period. The government is currently focusing on enhancing the productivity of the informal economy by easing access to the formal system and reducing red tape, as reflected in the National Strategy for Informal Economic Development 2023–2028, launched in October. Lastly, in late October, the government announced that it would scale up solar projects and increase energy imports in response to volatile hydropower output, boding well for energy security.

Inflation increased to 3.2% in August from July’s 1.9%. Inflation should average around current levels next year. That said, food prices may rise more than expected, as the El Niño weather phenomenon could take a toll on crops. Global commodity prices are a key factor to watch.