The many unfinished buildings — most owned by Chinese investors — lining the streets of the coastal town of Sihanoukville may be symptomatic of the Cambodian economy entering 2023.
Cambodia’s economic rebound in 2022, with GDP growth of 4.8 per cent, has been slower than many had hoped. For 2023, the Ministry of Economy and Finance has pegged Cambodia’s economic growth at 6.6 per cent, an ambition endorsed by major international financial institutions such as the Asian Development Bank and International Monetary Fund. But the World Bank projects a more conservative 5.2 per cent GDP growth, considering the gloomy outlook for the global economy.
As a small, export-orientated economy, Cambodia faces major challenges as world trade growth slows. A major obstacle to achieving the government’s GDP growth goal may be the tourism sector, which has failed to recover from the collapse caused by the COVID-19 pandemic. Dubbed the ‘green gold’ by the Cambodian government, their economic projections lean heavily on international tourism. But with new COVID-19 outbreaks looming, Cambodia’s leading foreign exchange earner is facing great uncertainties.