PHNOM PENH, Sept. 22 (Xinhua) -- The Asian Development Bank (ADB) on Wednesday lowered Cambodia's economic growth forecast to 1.9 percent in 2021, down from its April projection of 4 percent, due to the prolonged COVID-19 pandemic.
But the growth is expected to rebound to 5.5 percent in 2022, said an ADB new update.
"The protracted pandemic has hurt services and domestic demand," ADB country director for Cambodia Sunniya Durrani-Jamal said in a press release.
"Lockdowns and temporary factory closures hit production in the garments, travel goods, and footwear sector earlier this year," she said.
The economy in the Southeast Asian nation is mainly driven by agriculture, tourism, garment exports, and real estate and construction.
The report said the agriculture sector is expected to grow by 1.5 percent and added that local COVID-19 outbreaks has disrupted agricultural supply chains, but the overall impact was limited.
Agricultural exports rose 30.3 percent year-on-year in the first half of 2021, with solid growth of non-rice exports, it said.
Domestic demand for food, accommodation, transportation, and other in-person services has been severely limited by the COVID-19 outbreak and lockdowns, the report said, adding that restrictions on international travel remain, and international visitor arrivals were down by 91.3 percent year-on-year in the first half of 2021.
Growth in services output is projected to be minus 0.6 percent in 2021, the report said.
The exports of garments, travel goods, and footwear sector (GTF) were well below pre-pandemic levels in the first half of 2021, albeit higher than in 2020, it said, adding that other manufacturing has continued to thrive, and that construction activity has begun to recover, with imports of construction materials rising 23.5 percent year-on-year in the first six months of 2021.
Growth in industry is now projected at 5.3 percent in 2021, subject to accelerating GTF exports and persistent strength in other manufacturing, the report said.
According to the report, the Cambodian government has taken steps to mitigate the pandemic's economic and social impacts, and those measures included free COVID-19 vaccines and treatment, cash transfers to poor households, economic stimulus, and loan restructuring programs.
"To increase people's wellbeing and sustain growth, the government will need to continue strengthening its social protection systems and improve the quality of healthcare and education," Durrani-Jamal said.
"Steady reforms are also needed to attract investment for high quality infrastructure, including digital infrastructure. Enacting reforms to enhance the performance of the civil service is also fundamental to improving the country's international competitiveness," she added. Enditem
