Cambodian economy to grow 4% in 2021 and 5.5% in 2022, forecasts ADB

Real estate and construction is expected to recoup after last year’s dip 

The economy of Cambodia is predicted to flourish by 4 percent this year and 5.5 percent the year after, reported The Phnom Penh Post, citing a report by the Asian Development Bank (ADB). 

“The economy contracted by 3.1 percent in 2020 because of the global coronavirus disease – Covid-19 – pandemic. The government has responded quickly to the recent spike in cases, and we expect the economy to return to growth in 2021,” said Sunniya Durrani-Jamal, the country director for Cambodia at ADB. 

“This will help increase household incomes, but not all sectors and regions will benefit equally, so it will be essential to closely monitor household welfare and the need for additional support.” 

On the other hand, Cambodia Chamber of Commerce’s Vice President Lim Heng believes that the recovery will only occur if “more and more people get vaccinated.” 

He explained that they will be able to calculate the Kingdom’s economic growth better once 75 percent or more of the population has been injected to maintain economic stability and wellbeing. 

“Now, some factories have been shut down by the Covid-19 outbreak, which has led to the Cambodian economy continuing to decline.” 

Heng warned that the country won’t meet the prediction if the government won’t be able to control the outbreak in one or two months and the pandemic persists. 

Based on the 2021 Asian Development Outlook, industrial production is anticipated to surge by 7.1 percent in 2021 and 7 percent in 2022 as the travel goods, footwear, and garments sector, as well as the light manufacturing market, including bicycles and electronics, recover. 

Services will recoup slower than the others, rising by 3.3 percent in 2021 and 6.2 percent in 2022. Analysts explained that the measures to curb the outbreak that started in February have deterred the sector’s activities. 

Tourism will remain held back since travel restrictions will most likely stay in place for most of 2021. Real estate and construction will experience a growth trend this year and will be recuperating from last year’s decline.

Despite the unfortunate outlook in tourism, the major winners at PropertyGuru Cambodia Property Awards 2020, namely Meridian International Holding (Cambodia) Ltd., Urban Hub (Cambodia) Co., Ltd., Peng Huoth Group, Yin Yi Venture Co., Ltd., and Urban Living Solutions Co., Ltd., are looking towards the domestic market and hoping for continued recovery. 

More: With its neighbours still reeling from COVID-19 and political upheavals, should Cambodia anticipate more FDIs?

“The uneven pace of the recovery across sectors will continue to put pressure on some households and firms this year, which will slow down the overall recovery,” explained ADB’s Durrani-Jamal. 

“Key risks to the outlook include widening community outbreaks of Covid-19, slower than expected growth for Cambodia’s major trading partners such as the US and EU, continued weakness in domestic demand, and stress on financial services and banking,” she added, noting that the government must maintain its accommodative fiscal policy in 2021 and 2022 to sustain growth. 

 Know of any award-worthy homes, condos, flats, or other real estate projects in Cambodia? Nominate them for the 6th Cambodia Property Awards by 9 July 2021. Simply visit asiapropertyawards.com/award/cambodia-property-awards for more details.