As the pandemic spreads through workplaces, income loss and mounting debt are shocking households now and could hold longer-term adverse effects for Cambodia’s economy, according to a series of reports.
The World Bank projected 4 percent GDP growth for Cambodia this year as the region starts to recover from the global pandemic-induced economic downturn, but noted continuing issues with the country’s tourism- and garment-driven economy as well as a high risk of lasting income inequality.
The World Bank points to a rise in some agricultural and non-garments manufacturing exports this year despite a pandemic-induced economic downturn as it forecasts that Cambodia will be back to economic growth next year.
Hit by the global economic slowdown and the loss of E.U. trade benefits, Cambodia’s economy is projected to contract 2 percent this year, with the World Bank warning that poverty rates will be on the rise regionwide.
Cambodia’s GDP growth this year could drop to its lowest rate in more than a decade, the World Bank projects, with some economic experts warning that the country’s reliance on international markets could slow recovery.
Possible E.U. trade sanctions, rising indebtedness and slowing foreign investment — which “peaked” last year — pose substantial risks to the Cambodian economy despite continuing strong growth, the World Bank said in its latest country update.
The World Bank has warned of the economic risks of Cambodia losing preferential trade access to the European Union, and urged the government to be ready with measures to mitigate the potential shocks to the economy.
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