A Cambodian vendor wearning mask (Photo: xinhua/VNA) Phnom Penh (VNA) - Cambodia'seconomic growth is projected to slow sharply to 2.5 percent in 2020 due to theimpact of the COVID-19 outbreak, according to a World Bank's report released onMarch 31.
After consecutively attaining aneconomic growth of 7.1 percent in recent years, the bank's East Asia andPacific Economic Update said the outbreak caused sharp decelerations in most ofCambodia's main engines of growth in the first quarter of 2020, includingweakened tourism and construction activity.
“Real growth is projected to slow sharply to 2.5 percent in2020, but the growth rate will recover to 5.9 percent in 2021 under thebaseline scenario,” said the report. It added that the unprecedented globalshock triggered by the pandemic has significantly affected the country’seconomy in all its major sectors: agriculture, tourism, garments, textiles andconstruction”.
The situation was not helped when the European Union said itwill withdraw 20 percent of its free trade status with the country, hitting thecountry’s coffers by about 1.1 billion USD from August 12.
“In the worst casescenario, real growth is projected to diminish to 1 percent in 2020 and 3.9percent in 2021,” according to the report.
“Spillovers to the construction and real estate sector – one ofCambodia’s growth drivers and heavily invested in by Chinese investors – amidfinancial market turmoil could potentially be detrimental to growth,” it said.
The report said rebounds in economic activity in China and majormarkets in 2021 will improve Cambodia’s growth outlook next year.
In the first two months of this year, foreign arrivals inCambodia dropped by 15 percent. In 2019, the country welcomed 6.6 milliontourists, a 6.6 percent increase from the year before. The sector generatedapproximately 5 billion USD and accounted for 12 percent of the country’s grossdomestic product (GDP). Border restrictions and fear of infection haveled many people globally to spend more time and even work from home./.
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