flag Cambodia Cambodia: Economic Outline

Economic Indicators

Cambodia has enjoyed steady economic growth between 1995 and 2019, with GDP growth averaging nearly 7.6%. Nevertheless, the country’s economy experienced an unprecedented contraction in 2020. Cambodia is rebounding from the pandemic, experiencing a GDP growth of 5.2% in 2022. Driving this recovery is the manufacturing sector, contributing more than 3% to the real GDP. Although agriculture encountered difficulties due to weather and increasing costs, the service sector demonstrated a robust resurgence. According to the latest IMF estimates, the economy expanded by 5.3% in 2023, driven by a revival in tourism and robust performance in non-garment exports. Garment exports have experienced a decline, with only modest signs of recovery observed in the third quarter. The output gap is expected to gradually narrow, approaching a level below the pre-crisis trend of potential output and turning positive by 2025. Medium-term growth is projected at around 6.3%, albeit with significant uncertainty, contingent upon the implementation of anticipated reforms.

In 2023, the fiscal deficit widened to approximately -3.6% of GDP before decreasing to about 2% in 2024 and stabilizing at 2.5% over the medium term (IMF). The uptick in the deficit in 2023 primarily stemmed from increased spending requirements related to the 2023 Southeast Asia Games, the General Election, a scheduled public sector wage hike, and the completion of ongoing infrastructure projects from 2022. The revenue-to-GDP ratio is anticipated to see a modest rise over the medium term, bolstered by reforms in tax and customs administrations. According to the IMF analysis of debt sustainability, under the baseline scenario, the total public and publicly guaranteed (PPG) debt-to-GDP ratio, which stood at 35% of GDP by the end of 2022, is forecasted to increase by approximately 4 percentage points of GDP over the next decade due to elevated financing costs associated with the fiscal deficit. In 2023, inflation was projected to average 2.3%, gradually converging to its long-term trend of approximately 3% by 2024, provided there were no additional shocks in commodity prices. Agriculture represents 22.2% of GDP (World Bank, latest data available) and includes rice, rubber, corn, vegetables, cashews, cassava (manioc, tapioca), tobacco, and silk. However, the primary sector is vulnerable to climatic events, and production remains largely insufficient. Industry represents an additional 37.9% of GDP, which includes garments, construction, rice milling, fishing, wood and wood products, cement, gem mining, and other textiles. Services account for almost 34%, with the tourism sector holding a pivotal role.

Since 2010, there has been a notable shift in employment composition, moving away from agriculture towards manufacturing. The share of employment in agriculture has decreased from 55% to less than 40%, while the industrial sector's share has increased from 16% to 25% over the same period. Additionally, the expansion of national income has led to growth in the non-tradable sector, with the contribution of construction to GDP rising from 4.9% to over 10% between 2012 and 2022. Moreover, there has been a significant reduction in the poverty rate, declining from 36.7% in 2014 to 16.6% in 2022. Cambodia’s unemployment rate declined to 0.3% in 2023 from 0.4% one year earlier, according to figures released by the labor ministry. Inequalities are also evident: while the GDP per capita in Cambodia was last recorded at USD 5,355 in 2022 - when adjusted by purchasing power parity (PPP) - or equivalent to around one-fourth of the world's average, two-thirds of the households in Cambodia experience seasonal food shortages, especially in rural areas, and 32% of children under five are stunted (World Bank).

 
Main Indicators 20222023 (E)2024 (E)2025 (E)2026 (E)
GDP (billions USD) 28.8230.9433.2335.8638.78
GDP (Constant Prices, Annual % Change) 5.25.66.16.46.5
GDP per Capita (USD) 1,8021,9162,0372,1762,330
General Government Gross Debt (in % of GDP) 34.835.335.535.035.3
Inflation Rate (%) n/a2.03.03.03.0
Current Account (billions USD) -7.86-3.40-2.66-2.28-2.37
Current Account (in % of GDP) -27.3-11.0-8.0-6.4-6.1

Source: IMF – World Economic Outlook Database - October 2021.

Note: (e) Estimated Data


 
Monetary Indicators 20162017201820192020
Cambodian Riel (KHR) - Average Annual Exchange Rate For 1 GHS 1,017.22931.03883.510.77731.42

Source: World Bank - Latest available data.

 

Main Sectors of Industry

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 38.9 25.4 35.7
Value Added (in % of GDP) 21.9 37.7 33.7
Value Added (Annual % Change) 0.7 8.3 2.2

Source: World Bank - Latest available data.

 

The Active Population in Figures

201820192020
Labour Force 9,185,1839,319,2199,163,843

Source: International Labour Organization, ILOSTAT database

 
201720182019
Total activity rate 84.94%84.94%84.90%
Men activity rate 89.57%89.61%89.61%
Women activity rate 80.61%80.56%80.48%

Source: International Labour Organization, ILOSTAT database

 

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Indicator of Economic Freedom

Definition:

The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labour freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.

Score:
57,25/100
World Rank:
118
Regional Rank:
24

Economic freedom in the world (interactive map)
Source: Index of Economic Freedom, Heritage Foundation

 
 

Country Risk

See the country risk analysis provided by Coface.

 

Indicator of Political Freedom

Definition:

The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.

Ranking:
Not Free
Political Freedom:
6/7

Political freedom in the world (interactive map)
Source: Freedom in the World Report, Freedom House

 

Indicator of Freedom of the Press

Definition:

The world rankings, published annually, measures violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position are assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire incorporating the main criteria (44 in total) to assess the situation of press freedom in a given country. This questionnaire was sent to partner organisations,150 RWB correspondents, journalists, researchers, jurists and human rights activists. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).

World Rank:
144/180

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Sources of General Economic Information

Main Online Newspapers and Portals
Cambodia Information Center
Phnom Penh Post
Einnews.com
Useful Resources
Ministry of Economy and Finance
Ministry of Commerce
National Bank of Cambodia
 
 

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Latest Update: May 2024