flag Cambodia Cambodia: Economic Outline

Economic Indicators

For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.

Cambodia has enjoyed steady economic growth since 2012, with GDP growth averaging nearly 7%. Nevertheless, the country’s economy experienced an unprecedented contraction in 2020, with GDP turning negative by 3.1% (from +7.1% one year earlier - IMF, 2022), due to the global COVID-19-related crisis: although health-wise the country was not severely impacted, international travel restrictions weighed heavily on the tourism sector (which accounts for almost one-fifth of GDP alone), as well as on foreign demand for textiles-clothing and travel goods. Household consumption was also hampered by the pandemic. The situation gradually stabilized in 2021 (+1.9%) and the IMF expects Cambodia’s GDP to rebound at 5.7% in 2022 followed by 6.4% growth in 2023.

Cambodia's public deficit widened in 2020, reaching 34.2% of GDP (from 28.6% one year earlier), and then 37% in 2021. Although relatively low, it is mostly held by foreigners (especially China) and denominated in foreign currencies. Similarly, the economy is highly dollarized, exposing an already fragile banking sector to substantial currency risks. Furthermore, private sector indebtedness is extremely high, especially household indebtedness. The economic measures taken to offset the pandemic-led crisis – targeted primarily towards the tourism, textiles and aviation sectors and to social assistance for most vulnerable households – led to a budget deficit of 3.1% of GDP. As government revenues dropped and most measures have been extended, the deficit reached 5.6% in 2021 and is forecasted to stabilized at 4.5% for 2022 (IMF, 2022). Inflation also saw a rise at 2.9% in 2020 (from 2% one year earlier) and then 2.5% in 2021. It should follow an upward trend with 3.2% in 2022 (IMF, 2022). The Kingdom remains dependent on international aid, especially from China. Agriculture represents 22.8% of GDP (World Bank, 2022) 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 27.9% of GDP, which includes garments, construction, rice milling, fishing, wood and wood products, cement, gem mining, and other textiles. Services account for almost 38%, with the number of tourists constantly increasing in recent years (reaching 6.6 million foreign visitors in 2019, +6.6% y-o-y – though in the first ten months of 2020 foreign arrivals decreased by 76% and then was non existent due to the pandemic). Offshore hydrocarbon reserves were recently discovered and could present a significant advantage for the country; however, the first extraction has been constantly postponed, until Singapore-based oil and gas exploration company KrisEnergy Ltd finally extracted the first drop of crude oil from Cambodian waters in December 2020. The government led by Prime Minister Hun Sen of the Cambodian People's Party (CPP) has been ruling for 35 years and has all the seats in the National Assembly. However, it has been facing increasing protests following the severe enforcement of anti-pandemic measures and a decline in economic activity. The EU reviewed its trade agreement with Cambodia and diplomatic and economic relations with the U.S. have deteriorated (curtailing several public aid programmes, including military assistance), thus pushing the country to strengthen its ties with China.

The official unemployment rate is below 1%, it decreased to 0.31% in 2020 from 2.4% in 2019 (National Institute of Statistics, Cambodia, 2022) although this number severely hides the near unemployment conditions of many Cambodian workers. According to a report from the International Labour Organization, half of the jobs in Cambodia are "vulnerable" (higher than the average in Southeast Asia) as most people are underemployed or juggle between several part-time jobs. Unemployment reached 3% in 2021 (World Bank, 2022). The poverty rate has decreased significantly in the decade, dropping to 12.9% of the population in 2018 compared to 47.8% in 2007 (Asian Development Bank, 2020); however, the effect of the pandemic was significant and Cambodia counts about 17.8% of its population still living under the poverty line (Khmer Times, 2021). Inequalities are also evident: while the GDP per capita PPP was estimated at USD 4,583 in 2019 by the World Bank, two-thirds of the households in Cambodia experience seasonal food shortages, especially in rural areas, and 32% of children under five are stunted. Such conditions are likely to be exacerbated by the effects of the COVID-19 global crisis. The Gross Domestic Product per capita in Cambodia was last recorded at 4191.85 USD in 2020, when adjusted by purchasing power parity (PPP). The GDP per Capita, in Cambodia, when adjusted by Purchasing Power Parity is equivalent to 24% of the world's average (World Bank, 2022).

 
Main Indicators 20202021 (e)2022 (e)2023 (e)2024 (e)
GDP (billions USD) 25.19e26.3128.3330.7133.32
GDP (Constant Prices, Annual % Change) -3.1e3.05.16.26.6
GDP per Capita (USD) 1e1112
General Government Gross Debt (in % of GDP) 35.236.336.837.237.9
Inflation Rate (%) 2.92.95.23.83.0
Current Account (billions USD) -2.18-12.62-8.87-5.21-4.74
Current Account (in % of GDP) -8.7-47.9-31.3-17.0-14.2

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

Note: (e) Estimated Data


 
Monetary Indicators 20162017201820192020
Cambodian Riel (KHR) - Average Annual Exchange Rate For 1 GBP 5,480.025,213.085,404.935.005,247.16

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) 34.5 27.9 37.6
Value Added (in % of GDP) 22.8 34.7 36.2
Value Added (Annual % Change) 0.4 -1.4 -6.3

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: October 2022

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