The Cambodian economy grew 7.5 per cent in 2018, according to the World Bank’s (WB) recently-released Cambodia Economic Update, which said this better-than-expected growth was driven largely by the rapid expansion of exports and ongoing construction boom. The report called for filling skills gaps and investing in human capital to underpin long-term growth.
Exports of garments, footwear and travel goods, which account for more than two-thirds of total merchandise exports, recorded a five-year high, rising by 17.6 per cent in 2018, up from 8.3 per cent in 2017. The construction, real estate and tourism sectors accounted for about 60 per cent of total approved investment in 2018. To support the construction boom, manufacturing of building materials, furniture metals, and plastic products also increased rapidly, said the report.
The European Union (EU) market, including the United Kingdom, currently accounts for more than one-third of Cambodia’s exports, particularly garments, footwear and bicycles. The potential end of the country’s duty-free access to the European market for exports—or the ‘Everything But Arms’ arrangement—will likely result in slower exports, it cautioned. The Cambodia Economic Update is a biannual report that provides up-to-date information on short- and medium-term macroeconomic developments in Cambodia.