Cambodia's economy is expected to remain strong over the next two years, driven by garment and footwear manufacturing, construction, and services, according to the Asian Development Bank (ADB)'s annual economic outlook on Wednesday.
The bank's outlook forecasts gross domestic product (GDP) growth for Cambodia of 7 percent for 2016 -- the same rate achieved in 2015 -- before slightly up to 7.1 percent in 2017. "With continued expansion in industry and services, diversification in the garments and light manufacturing sectors and in export destinations, Cambodia is expected to exhibit robust economic growth over the next two years," Samiuela Tukuafu, ADB country director for Cambodia, said in a press conference here. "To sustain growth, Cambodia needs to further diversify its economy and provide further opportunity for employment by attracting new industries," he said.
According to the report, growth in industry is projected at 9.5 percent this year, supported by further diversification in products with higher value added such as garments, footwear and electronics. The service sector is expected to expand by 7.8 percent, it said, adding that agriculture is projected to grow by 1.6 percent, assuming favorable weather.
It said growth in construction is expected to continue moderately in comparison to the rapid pace of recent years. Subdued global food and fuel prices are expected to contain inflation at 2.5 percent this year, before rising to 3 percent next year, it added.
The report also warned that rapid growth in credit and a real estate boom have heightened risks in the financial sector. "Efforts to build policy buffers and resilience should continue to ensure a stable financial sector," it said.
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