Cambodia’s economy is expected to grow by 6.9 percent this year according to a report issued by the World Bank, while the report’s authors also acknowledged that several national and global risks could disrupt their prediction.
“Our base projections here anticipate a certain set of conditions, and in Cambodia we are assuming the election will take place as planned and will not destabilise the economy,” said Sudhir Shetty, the World Bank’s chief economist for East Asia and the Pacific, referring to the national election scheduled for July.
“There is the possibility there may be greater instability as a result in the future, after the election – and the growth we anticipate for Cambodia does not account for that,” he said.
Cambodia’s forecasted growth rate was the highest of the 14 countries analysed in the report, titled “Enhancing Potential”, and this year’s forecasted growth for nine Asean countries, excluding Singapore, was 5.4 percent.
Risks to those projections could arise in the near future, and Shetty warned that rising tensions between the United States and China could have a significant impact on economic growth across Southeast Asia if it led to tariffs on Chinese exports to the US.
Southeast Asia has developed a strong value chain of production for Chinese products, he said, and any negative impacts associated with tariffs placed on those products would ripple across the region.
“In 2018, we’re looking at global growth higher than any year since 2010 – but in our base case, the global economy is really firing on all engines,” he said. “This threat on a range of products injects uncertainty into that view of the global economy.”
The report notes several things that boosted Cambodia’s economic growth last year, including a rise in tourist arrivals and increased agricultural output due to favourable weather conditions.