Phnom Penh (VNA) – The World Bank East Asia and Pacific Economic Update October 2020, released on September 29, forecast the Cambodian economy will contract 2 percent this year.

Cambodia’s unfavourable growth outlook alongside disruptions to jobs and lower household incomes means poverty is likely to increase, it said.

The bank added that “significant uncertainty” remains for Cambodia’s economic growth outlook with downside risks including a local COVID-19 outbreak, deeper and prolonged decline in tourist arrivals as well as increased global trade tensions and protectionism.

“Cambodia’s economy and its key growth drivers – namely construction, tourism and merchandise exports – continue to be severely affected by the global crisis unleashed by the COVID-19 pandemic,” the World Bank said.

On a positive note, the WB said Cambodia’s domestic demand had been gradually returning, as well as having good prospects with current bilateral trade negotiations, forecasting economic growth of 4.3 percent in 2021 and 5.2 percent in 2022.

Last week, the Asian Development Bank (ADB) revised its 2020 growth forecast for Cambodia, with a 4.0 percent contraction for the country’s gross domestic product this year, compared to its June projection of a 5.5 percent decrease.

The Asian Development Outlook (ADO) 2020 Update also expected Cambodia’s economic growth to rebound to 5.9 percent in 2021 but stressed that this prediction is uncertain./.