ADB retains Cambodia's growth forecast at 5.3 pct in 2022

Garment workers make clothes at a factory in Phnom Penh, Cambodia, on Dec. 17, 2021. Photo by Xinhua/Wu Changwei

PHNOM PENH -- The Asian Development Bank (ADB) maintained its economic growth forecast for Cambodia at 5.3 percent in 2022, but lowered the 2023 forecast to 6.2 percent from the earlier prediction of 6.5 percent due to weaker global growth, according to its updated outlook report released on Wednesday.

Cambodia's garments, travel goods, and footwear outputs remained robust, registering 39.8 percent year-on-year growth in the first half of 2022, despite the economic slowdown in the United States and Europe, the report said.

The non-garment manufacturing sector continued its strong growth momentum, it said, adding that construction gradually recovered, with imports of construction materials rising 22.8 percent.

Industry output is projected to grow 9.1 percent this year, before moderating to 8.6 percent in 2023 because of weaker external demand, the report said.

"An increase in Cambodia's manufactured product exports, and a gradual recovery in the construction and service sectors, have supported economic growth in 2022 despite the drop in agricultural growth caused by surging fuel and fertilizer prices and heavy rains," ADB country director for Cambodia Jyotsana Varma said in a news release.

"The government's socioeconomic interventions such as the Cash Transfer Program for Poor and Vulnerable Households have been effective in lessening the impacts of the global surges in commodity prices on the poor," she added.

The report revised Cambodia's 2022 inflation forecast to 5 percent, from the 4.7 percent forecast in April, due to the strong pass-through effects of fuel price increases caused by the Russia-Ukraine conflict.

The inflation forecast for 2023 was kept at 2.2 percent, it said.

According to the report, risks to the outlook include the potential emergence of new and more deadly COVID-19 variants, the monkeypox outbreak, a rapid increase in nonperforming loans, the weakened growth of major trading partners, global supply chain disruptions, and a worse-than-expected surge in energy and commodity prices.

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