The World Bank has repeated its prediction that Cambodia’s economy will grow by 6.7 percent this year.
In its global economic prospects report, released Tuesday in Washington, the Bank said that it expected Cambodia’s gross domestic product (GDP) to have grown by 6.6 percent in 2012.
The World Bank also said that economic growth in Cambodia is estimated to reach 7 percent in both 2014 and 2015.
“Growth prospects in Cambodia (around 7 percent) are based on achieving the dividends from focus on higher rice production, inflows of [foreign direct investment] into the growing garment industry and a growing tourism industry,” the report says.
The World Bank estimate for this year is lower than the Ministry of Economy and Finance’s prediction of 7 percent GDP growth in 2013, as seen on the ministry’s website.
Cambodia’s trade deficit grew from 8.7 percent in 2011 to 10 percent in 2012 as a proportion of GDP, the World Bank estimated. But the bank forecasts in the report that this figure will once again drop to 8.7 percent this year and be down to 6.7 percent by 2015.
The report raises concerns that some developing countries with low reserves are exposed to external shocks in a volatile global economy.
Large amounts of Cambodia’s garment exports are dependant on turbulent economies in Europe and the U.S.
The report included Cambodia among 30 developing countries with both a trade deficit and a government budget deficit of more than 4 percent of GDP, for whom “vulnerabilities are even more serious.”
In the East-Asia and Pacific region, growth “slowed to an estimated 7.5 percent in 2012, from 8.3 percent in 2011, largely due to weak external demand and policy actions in China to contain inflation,” the bank said.