Cambodia’s uncertain economic rebound in 2021

Cambodia’s government has received global accolades for its handling of the COVID-19 pandemic. The country has recorded a total of 364 COVID-19 cases and no fatalities as of 30 December 2020. But the economic fallout from the severe public health crisis is looming large for Cambodia.

The global economic downturn triggered by the pandemic has hit Cambodia’s economy hard. The Kingdom’s main engines of growth — tourism, construction and the garment industry — contributed more than 70 per cent of GDP growth and 39 per cent of total employment in 2019. Due to travel restrictions and lockdowns, Cambodia’s tourism and hospitality sector has collapsed. International tourist arrivals declined by 74 per cent to 1.2 million between January and September 2020, from 4.8 million in the same period in 2019. An estimated 3000 tourism-related businesses have closed down and 45,400 jobs have been lost.

The construction and real estate boom that was fueled by foreign investment has come to a grinding halt. Cambodia’s manufacturing exports have significantly declined due to disruptions to global supply chains and the cancellation of orders from the European Union and the United States, Cambodia’s main export markets.

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