Cambodia Economic Outlook
Following GDP growth of 5.3% in 2022, the economy has seemingly remained resilient so far this year. In January-August, air traveler numbers increased by around 180% year on year. This, coupled with cooling inflation in January–June, has likely boosted the services sector and private spending. That said, merchandise imports contracted markedly in annual terms in January–May. In politics, Hun Manet was sworn in as prime minister for a five-year term in late August, succeeding his father, Hun Sen. At his first cabinet meeting, Hun Manet launched a five-year plan to boost the resilience of the economy, create jobs, reduce the poverty rate below 10% and increase the efficiency of public institutions. He also earmarked USD 100 million to boost the agricultural sector by improving irrigation.
Inflation slowed to 0.1% in June from May’s 0.5%. Average inflation will more than halve this year compared to last on cooling demand and looser supply chains. That said, food prices may rise more than expected, given the potential impact of the El Niño weather pattern on crops. Key factors to watch include China’s economic performance and the evolution of oil prices.