Cambodia’s gross domestic product (GDP) is set to return to growth in 2021, the Asian Development Bank forecast on Wednesday.
Cambodia, which enjoyed annual GDP growth of around 7 per cent prior to the pandemic, will see 4-per-cent growth in 2021 followed by 5.5 per cent in 2022, according to the ADB’s latest economic outlook.
In line with global trends, Cambodia’s economy contracted by 3.1 per cent in 2020 but the small country’s economy had proved “more resilient” than expected, ADB staff said in a briefing Wednesday.
“We expect the economy to return to growth during 2021 and 2022 and that’s despite the ongoing Covid-19 outbreak,” said ADB country economist for Cambodia, David Freedman.
“But we do see a range of downside risks, that includes low demands and high levels of household indebtedness, also further escalation of the Covid-19 outbreak and the spillover into the construction and banking sector could all lead to downward revisions to the growth outlook.”
Looking ahead, the bank expects Cambodia’s industrial production – centred on garments, footwear, and travel goods – to increase by 7 per cent this year.
Light manufacturing, such as electronics and bicycles, will also see a rise, as will agriculture – set for a 1.3-per-cent boost in 2021.
But the ADB warned that steps must be taken to ensure the recovery is “inclusive” as the pandemic had delivered a “huge” shock to household incomes.