Maintaining High Growth

Cambodia continues to enjoy robust
growth, albeit at a slightly slower pace. Real growth in
2014 is estimated to have reached 7.0 percent. The garment
sector, together with construction and services, in
particular finance and real estate, continues to propel
growth. However, there are signs of weaknesses in garment
and agricultural production that are slightly slowing
growth. Overall macroeconomic management remains
appropriate. Fiscal consolidation continues with further
improvements in revenue collection resulting from enhanced
administration. Poverty continues to fall in Cambodia
(poverty headcount rate in 2012 was 17.7 percent) although
the pace of poverty reduction has declined significantly.
Cambodia’s real growth rate is expected to moderate to 6.9
percent in 2015 and 2016, as it confronts stronger
competition in garment exports, continued weak agriculture
sector growth, and softer growth in the tourism sector.
Recent developments include: the garment sector continues to
be one of Cambodia’s main engines of growth, the external
position remains stable, supported by healthy foreign direct
investment inflows, underpinning the overall macroeconomic
stability, Exchange rate targeting continues to support
price stability, inflation has eased significantly with
continuing depressed food prices and the recent decline in
oil prices, and financial deepening continues, supporting
economic expansion as deposit and credit growth accelerated
quickly in 2014.