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ADB revises Cambodia's 2020 economic forecast upward
01 Oct '20
2 min read
Pic: Shutterstock
The Asian Development Bank (ADB) recently revised upward its 2020 growth forecast for Cambodia due to the country’s improved agricultural performance and an increase in volume of non-garment manufacturing exports. The Asian Development Outlook (ADO) 2020 Update forecasts a 4 per cent contraction for Cambodia’s gross domestic product (GDP) in 2020 compared to its June forecast of a 5.5 per cent contraction.
“The coronavirus disease (COVID-19) pandemic is an unprecedented global challenge, but fortunately Cambodia has been spared a health crisis. We expect growth to rebound to 5.9 per cent in 2021, boosted by supportive government policies, social assistance for the poor, and financing support for small and medium-sized enterprises,” said ADB country director for Cambodia Sunniya Durrani-Jamal in a press release.
“These measures, along with much-needed structural reforms, will reduce the direct and indirect impacts of COVID-19 on families and businesses, and help Cambodia’s economy emerge stronger from the pandemic,” he added.
A sharp drop in orders from Europe and North America led to shutdowns in one-third of Cambodia’s garment, footwear and travel goods factories during the first half of 2020. However, increased production of bicycles and electronics pushed up Cambodia’s non-garment manufacturing exports by 30.3 per cent year on year in the first half of this year. Total industrial output is projected to rise by 5.1 per cent in 2020 if exports of garments, travel goods and footwear continue to recover, ADB said.
Risks remain, such as a continued slowdown in the garment and construction industries, and poor harvests after low rainfall in June and July. Consumer demand may also continue to weaken amid the pandemic.
ADB is supporting the Cambodian government’s response to the pandemic and has provided $250 million in concessional financing to strengthen health systems, expand social protection and support economic recovery.
Under ADB’s 2019–2023 country partnership strategy, ADB will provide $1.45 billion in loans, grants, and technical assistance to Cambodia to support agriculture and natural resources management; improved urban and rural living conditions; renewable energy infrastructure; and education and skills development.
These initiatives aim to expand Cambodians’ access to public services and improve service quality, as well as improving the country’s business and investment environment.
“The coronavirus disease (COVID-19) pandemic is an unprecedented global challenge, but fortunately Cambodia has been spared a health crisis. We expect growth to rebound to 5.9 per cent in 2021, boosted by supportive government policies, social assistance for the poor, and financing support for small and medium-sized enterprises,” said ADB country director for Cambodia Sunniya Durrani-Jamal in a press release.
“These measures, along with much-needed structural reforms, will reduce the direct and indirect impacts of COVID-19 on families and businesses, and help Cambodia’s economy emerge stronger from the pandemic,” he added.
A sharp drop in orders from Europe and North America led to shutdowns in one-third of Cambodia’s garment, footwear and travel goods factories during the first half of 2020. However, increased production of bicycles and electronics pushed up Cambodia’s non-garment manufacturing exports by 30.3 per cent year on year in the first half of this year. Total industrial output is projected to rise by 5.1 per cent in 2020 if exports of garments, travel goods and footwear continue to recover, ADB said.
Risks remain, such as a continued slowdown in the garment and construction industries, and poor harvests after low rainfall in June and July. Consumer demand may also continue to weaken amid the pandemic.
ADB is supporting the Cambodian government’s response to the pandemic and has provided $250 million in concessional financing to strengthen health systems, expand social protection and support economic recovery.
Under ADB’s 2019–2023 country partnership strategy, ADB will provide $1.45 billion in loans, grants, and technical assistance to Cambodia to support agriculture and natural resources management; improved urban and rural living conditions; renewable energy infrastructure; and education and skills development.
These initiatives aim to expand Cambodians’ access to public services and improve service quality, as well as improving the country’s business and investment environment.
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