Amid the predictions by major global institutions about a slowdown across developed economies and its impact on developing nations, ASEAN countries like Cambodia remain a beacon of hope.
The Cambodian economy is estimated to grow at 5.6 percent this year against the earlier estimate of 6.6 percent. It was stated by Vongsey Vissoth, the Ministry of Economy and Finance’s permanent secretary of state, while taking part in an event on macroeconomic management and the 2023 budget law, last week.
The gross domestic product (GDP) in Cambodia is likely to reach $28.58 billion by the end of this year, according to Trading Economics global macro models and analysts’ expectations. In the long term, the Cambodian GDP is projected to be around $30.24 billion in 2024 and $38.39 billion in 2025, as per the econometric models.
According to the Economist Intelligence Unit (EIU), the real GDP growth of the Southeast Asian country will moderate to 5 percent in 2023, after reaching an estimated 5.5 percent in the previous year, as the economy continues to recover from the pandemic and benefit from new regional trade agreements, which promote inward investments and exports.
All these stand in stark contrast to the World Bank cutting its global economic growth outlook for 2023 to 1.7 percent from its earlier projection of 3 percent.
The Cambodian economy will grow stronger this year at 5.5 percent, said the Siam Commercial Bank (SCB) of Thailand in its latest report. The Economic Intelligence Centre (EIC) of the bank said in a report on Wednesday that Cambodia, Laos, Myanmar and Vietnam (grouped as CLMV) will report stronger growth this year with an increase in domestic demand and revival of the tour and travel sector, one of the major pillars of their economies.
While Vietnam is expected to report 6.2 percent economic expansion, the economy of the other two CLMV countries – Laos and Myanmar – may expand at the rate of 3 percent this year. However, the rebound will be uneven across countries, depending on economic fundamentals and country-specific risks, the EIC said.
Given the substantial contribution of the tour and travel sector to the gross domestic product (GDP) of Cambodia (18.2 percent) and Vietnam (9.8 percent), any increase in domestic and international tourism will play a significant role in the revival of both the ASEAN (Association of Southeast Asian Nations) economies, stated the Thai bank report.
As China, the second largest economy after the US and one of the biggest tourist source markets, has diluted travel restrictions imposed to curb the spread of the Covid-19 pandemic, the world is looking forward to increasing outbound tourism.
The service sector will benefit from rising tourist arrivals this year, particularly Chinese visitors who made up about 30-35 percent of total foreign tourists in 2019, stated the report of the Thai bank. In 2019, ASEAN received around 32 million Chinese visitors, but the number dropped to 4 million in 2020.
In 2023, the Cambodian Ministry of Tourism expects to earn around $4 billion in revenue from over four million international tourist arrivals and the generation of more than 15 million domestic tourists.
Only the tour and travel industry of Asia-Pacific is expected to recover this year, said the London-based World Travel & Tourism Council in its annual publication titled “Travel & Tourism Economic Impact”. While the revival is likely to contribute 71 plus percent to the region’s economy, the tour and travel sector will be further strengthened in 2024, the report added.
The decision of China to allow group tours as a pilot project from February 6 to 20 countries, including ASEAN member states of Cambodia, Indonesia, Laos, Malaysia, Thailand, the Philippines and Singapore, has enthused these nations about an increase in tourist arrivals and spending.
Source: Prakash Jha / Khmer Times