PHNOM PENH (The Cambodia Herald) -- Cambodia's economic growth is forecasted to reach 7.2 percent in 2014, and 7.5 percent next year despite the domestic uncertainty and instability in neighboring countries, according to a report by World Bank on Monday.
The report said Cambodia's garments continue to be the key engine of growth, followed by construction. Poverty rate continued to fall, to 18.6 percent in 2012, but the pace of poverty reduction has slowed from 2004-2011, when higher rice prices propelled growth. The banking sector has stabalized with rising foreign direct investment and private sector deposits. But growth could be put at risk, if labor unrest, floods, a further drop in rice prices, and potential regional political uncertainty flared up.
"Cambodia is enjoying another year of good growth, thanks to the return of strong recovery of the global economy," said World Bank Country Manager Alassane Sow.
"This strong growth will help Cambodia achieve its goals of further reducing poverty and boosting shared prosperity."
"Cambodia has joined the Olympians of growth. With an annual average of 7.7 percent for two decades now it is now the sixth-fastest in the world from 1993 to 2013," said senior country economist Enrique Aldaz Carrol. "A slower growth rate since the global financial crisis suggests Cambodia could look for way to further support economic growth and reduce poverty to help meet its aspiration."
The key challenge will be how stimulate the agriculture, tourism and manufacturing sectors, said the report, adding that measures such as increased public investment in farm advisory services, seed development and irrigation infrastructure can increase agriculture productivity Business can benefit from the removal of key constraints, such as high electricity costs and uncompetitive practices.
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