Source: www.cdc-crdb.gov.kh
Cambodia’s economic growth has held up well despite domestic
uncertainty and instability in neighboring countries. Real growth for 2014 was
estimated to reach 7.2%, driven by the garment, construction, and services
sectors. Bolstered by a strengthening global economy and with the expectation
of renewed confidence and the return of political stability in July 2014 after
a year-long political deadlock, Cambodia’s real economic growth rate for 2015
is expected to reach 7.5%.
Poverty in Cambodia has fallen sharply. World Bank estimates
suggest that Cambodia achieved the Millennium Development Goal (MDG) of halving
poverty in 2009. However, the vast majority of families who escaped poverty
were only able to do so by a small margin. The poverty rate was 18.6% in 2012,
with almost 3 million poor people and over 8.1 million who are near-poor. About
90% of them live in the countryside.
Human development, particularly in the areas of health and
education, remains an important development priority for Cambodia. About 40% of
children under five-years-old are malnourished and are short for their age.
Cambodia has made good strides in improving maternal health,
early child care, and primary education programs in rural areas. The number of
deaths per 100,000 live births decreased from 472 in 2005 to 206 in 2010, the
under-five child mortality rate decreased from 124 per 1,000 live births in
1998 to 54 per 1,000 in 2010, and the net primary school admission rate
increased from 81% in 2001 to 94.3% in 2012.
Cambodia has also been successful in preventing and treating
HIV/AIDS. As of 2011, 95% of people infected with HIV/AIDS in Cambodia have
access to antiretroviral treatment. This coverage rate is among the highest in
the developing world.
Trade and tourism in Cambodia slowed in the first half of
2014. Shipments of garments and footwear rose by 14.5% to $2.8 billion,
compared with a 17.0% gain a year earlier, and growth in total merchandise
exports moderated to 20.0% from 27.0% in the first half of 2013. Imports also
decelerated, to 6.7% from 24.7%.
Tourism grew at a more gradual pace, largely because tourist
arrivals to neighboring Thailand declined. Tourist arrivals to Cambodia rose by
5.2% to 2.2 million in the first half of 2014, against a 19.1% rise in the
year-earlier period. Other available data show that growth in credit to the
private sector was 12.0% year on year in June 2014, well below the expansion
rate of a year earlier.
Inflation increased to 4.9% in June 2014 and averaged 4.4%
in the first 6 months, driven mainly by higher food prices (ADB, 2014). A
tightening of customs duty collections late in 2013 put some upward pressure on
prices for imports. Inflation is now projected to be higher than previously
expected. Current account forecasts are retained from April. Gross official
reserves at midyear were $3.9 billion, cover for 3.8 months of imports of goods
and services.
Cambodia still faces a number of development challenges,
including effective management of land and natural resources, environmental
sustainability, and good governance. Corruption and weak public service
delivery impede inclusive development. The key challenge going forward is to
stimulate the agricultural and tourism sectors to once again become strong
engines of growth supporting poverty reduction, as well as to expand and
sustain growth in manufacturing including garments.
