Review Of Cambodian Q1 2024 Economic Data
With the close of the first quarter (Q1) in 2024 followed closely by the Khmer New Year (inevitably delaying some reports), we review what economic data has been released for Cambodia and the latest predictions for the Kingdom's economy in 2024.
We will update this article as more economic data for the financial quarter are released.
Cambodia's Economic Growth Outlook 2024
Among the latest updates on the outlook and predictions for Cambodia's economy in 2024, the Asian Development Bank (ADB) forecasts growth of 5.8 per cent in 2024 and 6 per cent in 2025 with tourism and strong manufacturing prospects the main reasons for growth in the Kingdom.
ADB Country Director for Cambodia Jyotsana Varma said, "We expect growth to be robust in 2024-2025, with the garments, footwear, and travel goods (GFT) sector poised for a significant upturn building on the positive momentum during the last quarter of 2023." According to Poullang Doung, ADB Cambodia's senior economics officer:
- Industrial output growth will accelerate to 8 per cent in 2024 and 8.4 per cent in 2025.
- Tourism is projected to grow by 5.4 per cent in 2024 and 5.2 per cent in 2025.
- Agriculture will see moderate growth of 1.3 per cent in 2024 and 1.4 per cent in 2025.
- Construction may see only modest growth.
Cambodia's inflation is predicted to remain around 2 per cent over the next two years and other key economic indicators, according to the ADB, are Cambodia's external public debt which is forecast at 36.3 per cent of the GDP in 2024 and 37.3 per cent in 2025. In addition, FDI (foreign direct investment) rose by 10.6 per cent to USD $4 billion in 2023 and contributed to an increase in international reserves to USD $20 billion.
During the first three months of 2024, several policies and strategies have also been announced by the Cambodian government:
- Public Investment Program (PIP) worth USD $11.69 billion comprising 617 projects for a three-year rolling plan from 2025-2027.
- The "Special Investment Promotion Program in Sihanoukville 2024”
- Confirmation of the Funan Techo Canal going ahead.
Cambodian Trade Growth Q1 2024
According to the General Department of Customs and Excise (GDCE), Cambodia’s total exports reached USD $6.26 billion in Q1 2024 - which represents an increase of 18 per cent compared to the same period in 2023, while imports were valued at USD $6.23 billion. The biggest trading partners for Cambodia in Q1 2024:
- China continued to be the biggest trading partner - Trade was worth USD $3.21 billion (slightly more than 12 per cent growth)
- Vietnam was the second biggest trading partner and the second biggest export destination valued at USD $2.32 billion (nearly 25 per cent growth)
- The United States remained the biggest export destination (accounting for 31.7 per cent) and the 3rd biggest trade partner - valued at USD $2.04 billion (an increase of just over 8 per cent)
- Japan was 4th and accounted for 5.8 per cent of the trade market for Cambodia with exports to Japan rising by 18.4 per cent.
Trade Agreements Reaping Rewards
Sophie Duong T. Nguyen, ADB Cambodia's senior country economist, said the Regional Comprehensive Economic Partnership (RCEP) and other bilateral FTAs will continue to Cambodia for export and investment, saying "The RCEP has significantly impacted Cambodia's economy by boosting trade - the export volume grew by almost 29 per cent year-on-year for Cambodia." Cambodian Prime Minister Hun Manet has also paid visits to Japan, France, Thailand, Laos and Australia, each reaping trade and potential economic agreements and partnerships.
RCEP & ASEAN Trade
The Cambodian Ministry of Commerce’s report for Q1 2024 indicated that Cambodia’s trade with RCEP countries reached USD $8.36 billion - an increase of 14.6 per cent from $7.29 billion compared to Q1 2023. This also accounted for 65.8 per cent of the total USD $12.7 billion total trade volume.
- Cambodia exported USD $1.77 billion worth of goods to ASEAN (agricultural products, clothes, footwear, travel goods, electronics, and bicycles)
- Imports increased by 10.31 per cent to USD $2.55 billion (food items, beverages, electrical and electronic equipment, construction materials, agricultural machinery and vehicles).
In Q1 2024 (and compared to the same quarter in 2023):
- Cambodia imported products worth USD $5.66 billion from the RCEP countries (an increase of 10 per cent from USD $5.14 billion).
- Cambodia exported products worth USD $2.69 billion to the RCEP countries (an increase of 25.7 per cent from $2.14 billion).
For trade with ASEAN in Q1 2024, the Ministry of Commerce reported that trade rose by 18.64 per cent to USD $4.32 billion.
Garments, Footwear And Travel Products (GFTs) Exports
- Cambodia exported USD $2,941 million worth of garments, footwear and travel products (an increase of 20 per cent).
- Apparel and textiles accounted for $2,167 million (an increase of 23 per cent) -
- Knitted apparel and clothing accessories saw export growth of 19.9 per cent and non-knitted apparel and clothing accessories as much as 30.8 per cent.
- Footwear represented USD $346.3 million (an increase of 6.9 per cent)
- Travel goods were worth UD $427.9 million (an increase of 16.6 per cent).
Other Key Cambodian Export Products
- Exports of edible vegetables, roots and tubers saw growth of 55.2 per cent valued at USD $407 million.
- Cereals saw just under a third of growth and were valued at USD $711 million.
- Rubber and articles made from rubber exports were valued at USD $317 million (a growth of 88.6 per cent)
Cambodian Bicycle Exports - Q1 2024
Cambodia's bicycle exports fell 43 per cent in Q1 2024 when comparing year-on-year data, reported the Cambodian General Department of Customs and Excise in April 2024. The Kingdom has been among the top exporters of bicycles for many years and the upswing in people riding during the pandemic also led to a boon in sales but the latest quarter suggests a big decline.
Ministry of Commerce's Secretary of State and spokesperson Penn Sovicheat said "The drop was due to global economic slowdown and uncertainties that had resulted in a plunge in purchase orders." In Q1 2024, exported bicycles (including electric bicycles) were worth USD $96.9 million with markets including the EU, the United States, Britain and Canada.