Economy to face new challenges
Cambodia’s economic growth remained strong last year though the Kingdom must now address major systemic challenges to build on its ascension into lower-middle income status in order to maintain healthy levels of development, the Asian Development Bank said in its annual report on April 6. The ADB flagship report, titled Asian Development Outlook 2017: Transcending the Middle-Income Challenge, forecasts that Cambodia’s GDP growth rate will remain stable over the next two years at 7.1 percent, up slightly from 7 percent in 2016. Inflation is expected to increase this year to 3.4 percent, up from 3 percent in 2016, and will continue to increase incrementally in 2018 to 3.5 percent. Samiuela Tukuafu, country director for the ADB, said during the launch of the report that Cambodia’s industrial sector growth, which is the biggest contributor to the country’s GDP, suffered from the recent global economic slowdown, bringing its growth to 10.5 percent in 2016, down from 11.7 percent in 2015. The industrial sector remains mostly focused on garment and footwear production, he added, and it should bounce back as global economic conditions improve.
