Economic activity in Cambodia remained stable throughout 2024, with a notable revival in exports driven by external demand. The World Bank's recent report, "Cambodia Economic Update: From Recovery to Resilience: Harnessing Tourism and Trade as Drivers of Growth," projects economic growth to reach 5.3 percent this year, an increase from 5.0 percent in 2023. This growth is primarily attributed to trade, with manufacturing exports surging alongside a partial recovery in tourism and ongoing foreign investment.
World Bank Country Manager for Cambodia, Tania Meyer, emphasized the potential for further growth through diversification and productivity improvements. "Cambodia can further boost its growth by diversifying trade and improving productivity," she stated. Meyer also highlighted the importance of investing in human capital and reforming the business environment to facilitate job creation.
While international tourist arrivals have returned to pre-COVID-19 levels, spending remains below 2019 figures due to fewer visitors from high-spending countries. Additionally, domestic consumption faces challenges from subdued credit growth and high household debt.
The report underscores the need for fiscal management improvements and prioritizes reforms that enhance domestic revenue mobilization to support social spending and public investment. It advises Cambodia to diversify its export portfolio across goods—particularly manufactured and processed agricultural products—and services like travel and hospitality to mitigate vulnerability to external shocks.
A special section of the report examines how Cambodia can enhance productivity to sustain economic growth and achieve its goal of becoming a high-income country by 2050. Recommendations include accelerating structural transformation, promoting modernization and digitalization, and addressing key business environment challenges.