Cambodia’s economy is projected to expand 7 percent in 2019. (Photo: khmertimeskh.com)

Phnom Penh (VNA) – Cambodia’s economy is projected to expand 7 percent in 2019, lower than the rate of 7.5 percent recorded in the previous year as export moderate in line with a fall in global demand, according to the World Bank (WB)’s report.

WB experts said that in the long-term outlook, the Cambodian economy depends on the country’s ability to absorb rising foreign direct investment (FDI) inflows as well as domestic investments.

Cheaper energy and logistics costs, availability of skilled workforce, and improved supply chain linkages are the key for the country to maintain competitiveness.

The WB attributed Cambodia’s slower economic growth to the EU’s decision to start an 18-month process that could lead to suspension of its trade preference “Everything But Arms (EBA)” for Cambodia from February. Losing the EBA would likely result in slower export growth as the EU accounts for more than one-third of Cambodia’s exports, including garments, footwear and bicycles.

Andrew Mason, WB Acting Chief Economist for the East Asia and Pacific region, said that in order to achieve high growth in the coming years, Cambodia should work to better its competitive edge in the global market, which means it must strive to reduce the cost of doing business, improve its business environment, and most importantly, strengthen its human resources and labour skills.

Earlier, a group of experts from the International Monetary Fund (IMF) forecast Cambodia’ economy will expand from 6.5 to 7 percent this year. They said that the economy is facing higher risks if the EU removes EBA scheme.-VNA