PHNOM PENH, Sept. 27 (Xinhua) -- The World Bank has raised its growth forecast for Cambodia to 4.8 percent this year, up from its April projection of 4.5 percent, despite worsening global demand and rising commodity prices.
Traditional export-oriented growth drivers, especially the garment, footwear, travel goods, and bicycle manufacturing industries as well as agriculture, continued to underpin Cambodia's economic recovery, said the World Bank East Asia and Pacific Economic Update released on Tuesday.
In the second quarter of 2022, the economic recovery gained momentum as investment and trade expanded, the report said, adding that approved foreign direct investment (FDI) project value reached 315 million U.S. dollars in the second quarter of 2022.
"Merchandise (excluding gold) exports accelerated further, expanding at 33 percent year-on-year during the first seven months of 2022, driven mainly by a recovery of garment, travel goods, and footwear exports," the report said. "The services sector, especially the travel and tourism sector, also improved."
Aaditya Mattoo, chief economist for the World Bank's East Asia and Pacific, said Cambodia's successful control of the COVID-19 pandemic has revised domestic economic activities and increased merchandise exports.
"Cambodia has adopted a very successful strategy for a long time to deal with the COVID-19 shock and the economy has gradually recovered," he said at a press conference via video link.
According to the World Bank's report, the country's inflation is forecast to rise to 6 percent this year due to rising food and fuel prices before easing to 4.2 percent next year.
The report said that in 2023, the kingdom's economic growth is expected to improve to 5.2 percent, supported by recovering domestic consumption as employment rates improve along with strong government consumption during the election year.
The travel, tourism and hospitality industries are expected to see a boost, underpinned by a revival of domestic demand and tourism, it said.
"Over the medium term, the economy is expected to trend back to potential, growing at 6 percent. Poverty is expected to decline due to the projected economic recovery and moderating inflation," the report said.