Insights
Thu Chi
Maintaining a strong trade cooperation The Cambodian economy is highly dependent on international trade. Its heavy industry has yet to develop and its light industry holds a relatively weak position in the global value chain. Its areas of strength include processing sector for export (such as garments and footwear) and orders from FDI enterprises or from abroad. Meanwhile, domestic consumption still depends on supply from overseas.
Like numerous economies around the world, the Cambodian economy has been strongly impacted by the Covid-19 pandemic. While the effect is likely to take years to fully recover from, according to BIDV Training and Research Institute, there are still positive figures for Cambodia’s economy.
Macro-economy amid Covid-19 The assessment from BIDV Training and Research Institute is based on statistics from the National Bank of Cambodia (NBC) as of 14 July on the latest information and developments related to the Cambodian macroeconomy, financial and banking market in the first six months of 2020. In the first half of the year Cambodia's economy was hit hard by the Covid-19. The pandemic is considered the country’s largest unprecedented shock since 1994, affecting both supply and demand for the country.
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The Cambodian economy is forecast to continue facing challenges in the second half. The NBC and other international organisations (such as the WB, ADB and CEIC) predict that it will be hard for the country's economy to achieve high growth in 2020. GDP growth is forecast to be only 2.3 percent in 2020 (down sharply from 7.1 percent in 2019), before recovering and reaching 5.7 percent in 2021. This is mainly due to the decline of some of Cambodia’s important industries and sectors such as exports, services (especially tourism) and production. In particular, service sector growth in 2020 could well decrease by 1.7 percent compared to 2019 (especially tourism and real estate). Industrial sector growth is expected to reach 6.5 percent in 2020 (lower than the growth rate of 10 percent seen in 2019), mainly due to difficulties in exporting and narrowing garment and footwear production, construction and real estate industries. However, the Cambodian Government
