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How Is Cambodia Shaping Up In 2024 - Economic Data For First Five Months

on Jun, 11 2024

With five months of economic data available for Cambodia, there is still a mixed sentiment about the recovery of the Cambodian economy as certain sectors continue to lag, while government budget cuts and the state of the banks continue to weigh down on the positives.

The economic landscape in the Kingdom is difficult to gauge. The property sector is still in a correction phase, and the Cambodian government in May 2024 made budget cuts due to reduced tax and customs revenue and slower economic growth, while international financial institutions continue to predict good GDP growth. We look at the most recent economic data for the period from January to May 2024.

How Much Will Cambodia's Economy Grow In 2024?

In 2023, Cambodia is believed to have grown by five per cent according to the International Monetary Fund’s (IMF’s) Regional Economic Outlook of April 2024, while the World Bank puts the figure at 5.6 per cent.

Predictions for 2024 include:

The World Bank expects Cambodia's economic growth to be 5.8 per cent in 2024 and reach 6.1 per cent in 2025, and 6.4 per cent in 2026.
AMRO Projects Cambodia's Economy To Grow 5.6 Per Cent In 2024.
The IMF suggests a rate of six per cent in 2024 and 6.1 in 2025.
The Asian Development Bank (ADB) reports anticipated growth of 5.8 per cent in 2024.
The Cambodian Ministry of Economy and Finance of the Royal Government of Cambodia expects 6.6 per cent in 2024.

Tourism Arrivals - Cambodia (Jan-May 2024)

According to the latest information from the Cambodian Ministry of Tourism (MoT) and the State Secretariat of Civil Aviation (SSCA), there are around 500 flights per week to Cambodia from 31 operational airlines. The airlines operate flights from eight ASEAN countries, China, South Korea, Hong Kong, Taiwan, Qatar and the United Arab Emirates.

The MoT reported that just shy of 2 million tourists arrived in the first five months of 2024 (1,824,658) which includes just under half a million foreign visitors (477,258) representing an increase of 36.98 per cent compared to 2023, but as we have reported previously, the figures to consider are those pre-COVID.

However, the State Secretariat of Civil Aviation (SSCA) confirmed that in the first four months of 2024, more than 2 million air passengers passed through Cambodia's international airports. Either way, foreign tourist arrivals are currently around 84 per cent of the total in 2019.

The biggest tourist attraction in Cambodia is Angkor Wat, and the revenue is just under 60 per cent of the 2019 ticket sales levels.

In the region, Thailand for example, has already surpassed pre-pandemic tourism numbers but Cambodia (and other SEA nations) are still lagging. One of the reasons suggested for Thailand's recovery is the ease of visa on arrivals and extensions of stay which have, among others, targeted Chinese and Indian visitors.

Cambodia has added more air routes and many more are in discussion. Most recently those include adding new routes to Türkiye, Russia, and Australia but none are close to being in operation.

You can review our Q1 2024 Cambodian economic data here.

Cambodian Investments and Foreign Direct Investments (FDI) - May 2024

The Council for the Development of Cambodia (CDC) confirmed that Cambodia attracted fixed-asset investment of USD $246 million in May 2024 alone from 24 investment projects, raising the total investments for the year to approximately USD $2.74 billion.

The projects approved in May 2024 could create as many as 15,000 jobs reported the CDC, and nearly one-third (8) of the investments in May were in the popular Special Economic Zones (SEZ), with 17 invested elsewhere and the investments include:

A solar photovoltaic 60-megawatt (MW) solar power plant (Kampong Chhnang) worth USD $65 million.
Metal smelting and processing plant (Preah Sihanouk’s Prey Nop district) worth USD $26 million.
Steel pipe manufacturing plant (Sihanoukville) worth USD $16 million.
An aluminium plant (Jiangsu SEZ on National Road 6), worth USD $25 million.
Others were garment, footwear and travel goods factories.

China again was confirmed as the main investor in the Kingdom accounting for nearly half of all investment in May. Nearly a third of the investments were sourced domestically, with Singapore (10 per cent), Australia (2.3 per cent), Vietnam (2.29 per cent), South Korea (2 per cent), Senegal (3 per cent) and the United States (0,63 per cent) contributing the remaining.

Cambodia Manufacturing & Exports - January-May 2024

According to the trade data released by the Cambodian General Department of Customs and Excise (GDCE) in June 2024, Cambodia’s total export earnings in the first five months of the year were valued at close to USD $10 billion. The claims are that this sector has seen a positive turnaround after seeing declines for 18 months.

Garments, footwear and travel goods (GFT) accounted for 11 per cent of the Cambodian economy and contributed around 50 per cent of Cambodia’s real GDP growth in 2021. In May 2024 alone, GFT exports earned USD $1.19 billion.

The exports of garments, footwear and travel goods rose by 20.69 per cent compared to the same period in 2023 and earned the Kingdom USD $4.89 billion between January and May 2024.

Of the GFT in this period, knitted apparel articles and clothing accessories earned USD $2.18 billion and non-knitted apparel exports were worth USD $1.24 billion, leather and travel goods another (USD $762 million), and footwear (USD $615 million).
Vietnam accounts for 90 per cent of the Kingdom's raw cashew exports, and 667,000 tonnes have been exported from Jan-May 2024. This is an increase of 37 per cent compared to 2023 and generated a revenue of USD $851 million. The Cashew Nut Association of Cambodia is projected to cut the amount of raw cashew nuts exports by 70 per cent over the next ten years.
USD $308 million worth of car tires were exported between January and May 2024 which is a more than a 200 per cent increase compared to the period in 2023.

Cambodia's Trade With The EU Jan-May 2024

According to the Ministry of Commerce, Cambodia’s exports to the EU in this period were worth USD $1.56 billion which represents an 11.83 per cent increase compared to the same period in 2023.

Germany and Spain were the Kingdom's biggest trade partners from the EU - with bilateral trade volumes of USD $389 million and USD $357 million respectively.
The EU is also the largest buyer of Cambodia’s milled rice and 136,528 tonnes were exported worth USD $104 million, according to the Cambodia Rice Federation (CRF). This represented 45 per cent of Cambodia’s total rice exports of 302,529 tonnes (worth USD $219 million) in this 5-month period.

Regional Comprehensive Economic Partnership (RCEP) - Cambodian Trade 2024

The Ministry of Commerce (MoC) suggested trade with the Regional Comprehensive Economic Partnership (RCEP) countries reached USD $14.17 billion in the first five months of 2024. This is an increase of 14.2 per cent from the same period in 2023.