Macroeconomic Forecast Cambodia

May 2006 | Macroeconomic Forecasts

The latest estimates of Cambodia's 2005 GDP growth from the IMF have surprised considerably on the upside. The Fund estimates that the economy grew by 13.1% last year, making it the fastest growing economy in the region. Agriculture was the biggest surprise, growing by 17.1% compared to 1.1% in 2004, due to favourable weather conditions. Even without agriculture, the economy still grew by 11.2%, on the back of an impressive performance by the garment, tourism and construction sectors. Growth will, however, moderate in the year ahead, owing to a return to normal weather conditions and, more significantly in the long-run, the accession of Vietnam into the WTO. Vietnam is a major garment producer that currently faces quotas on exports. When these are removed, Cambodia's clothes and textile exporters will face greater competition.

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