Cambodia Economic Update, November 2019 Upgrading Cambodia in Global Value Chains

Cambodia's economy continues to show signs of robust growth, underpinned by solid export performance and strong domestic demand. Key macroeconomic data for the first six-months, however, indicate a slight deceleration of economic activity this year, compared to a strong growth performance of 7....

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Bibliographic Details
Corporate Author: World Bank Group
Format: eBook
Language:English
Published: Washington, D.C The World Bank 2019
Series:World Bank E-Library Archive
Online Access:
Collection: World Bank E-Library Archive - Collection details see MPG.ReNa
Description
Summary:Cambodia's economy continues to show signs of robust growth, underpinned by solid export performance and strong domestic demand. Key macroeconomic data for the first six-months, however, indicate a slight deceleration of economic activity this year, compared to a strong growth performance of 7.5 percent in 2018. Garment and footwear exports, accounting for about 70 percent of total merchandise exports, grew at 17.7 percent in 2018, but eased slightly to 15.3 percent (y/y) in June 2019. Bustling construction activity has continued, reflecting a sustained appetite for investment. As a result, steel imports skyrocketed, rising 63.5 percent (y/y) in volume terms in June 2019, up from 27.7 percent in 2018. During the first half of 2019, although the reported value of newly approved investment projects accelerated, foreign direct investment (FDI) inflows, of which about 40 percent originated from China, eased. The tourism sector remained resilient; international arrival growth increased to 11.2 percent (y/y) in June 2019, compared with 10.7 percent in 2018, with almost 40 percent of foreign visitors coming from China. Rising domestic consumption fueled by a surge in FDI inflows in recent years drove import growth. Imports of petroleum products and motor vehicles rose by 91.0 percent and 18.5 percent, respectively. Thanks mainly to depressed domestic food and oil prices, inflation continued to be subdued, declining slightly to 1.4 percent (y/y) in mid-2019, down from 1.6 percent in 2018. While being softly pegged at around 4,000 riel per US dollar, the local currency depreciated slightly to 4,089 riel per US dollar in August 2019, up from 4,018 riel per US dollar in December 2018, likely due to slower capital inflows