NBC raises Cambodia’s FY25 growth forecast to 6.2 percent

NBC raises Cambodia’s FY25 growth forecast to 6.2 percent

Cambodia’s economic growth is expected to reach 6.2 percent, and inflation will remain at a moderate level of 2.6 percent in 2025, according to an annual report from the National Bank of Cambodia (NBC) released on Monday.

NBC’s projections are higher than the World Bank’s forecast that Cambodia’s Gross Domestic Product (GDP) growth will marginally improve to 5.5 percent, and the Asian Development Bank (ADB) predicted Cambodia’s economy at 6.0 percent for this year.

The NBC report stated that economic activity will continue to be driven primarily by the growth of garment exports and the expansion of non-garment products, while tourism and agriculture show steady progress. However, the construction and real estate sectors remain weak.

However, it added Cambodia may also face several risks, mainly external ones, including uncertainty surrounding US protectionist policies, lower-than-expected growth in regional and global economies, instability in international financial markets, slowing economic growth in China, and the effects of climate change.

Additionally, Cambodia’s graduation from Least Developed Country (LDC) status may lead to the loss of certain export privileges and foreign financing sources, potentially putting pressure on the country’s economic growth.

Chea Serey, Governor of NBC, stated in the report that Cambodia’s economic growth is projected to continue recovering through 2025.

She said, “This growth will be primarily supported by an increase in exports, tourism, and foreign direct investment flows.” However, inflation may rise slightly due to expected increases in domestic demand and international oil prices.

Low inflation and stable exchange rates will continue to contribute to macroeconomic stability and confidence in the Cambodian economy, she added.

Source :Khmer Times