Phnom penh: The World Bank has revised its growth forecast for Cambodia, reducing it by 0.2 percentage points to 4.3 percent for the current year. However, it maintains its 5.1 percent growth projection for 2027, which remains unchanged from the previous forecast made in June of the previous year. Additionally, the bank has increased Cambodia's growth estimate for the previous year by 0.8 percentage points to 4.8 percent. These figures are part of the World Bank's Global Economic Prospects report, which was released in Washington.
According to Agence Kampuchea Presse, the outlook for Cambodia aligns with the World Bank's 4.4 percent growth forecast for China and is comparable to the projections of 4.1 percent for Malaysia and 4.0 percent for Laos. In the broader ASEAN region, Vietnam leads with a growth forecast of 6.3 percent, while Thailand lags with a projection of 1.8 percent. Other countries in the region, such as the Philippines, Indonesia, Timor-Leste, and Myanmar, have growth forecasts of 5.3 percent, 5.0 percent, 3.4 percent, and 3.0 percent respectively.
The World Bank anticipates that the expected export slowdown in emerging markets and developing economies in East Asia and the Pacific will be less severe than initially thought. This optimism stems from rising Chinese exports to non-U.S. markets and increased demand for chips driven by artificial intelligence. Despite existing trade agreements with the United States, the bank emphasizes that uncertainty remains, particularly concerning rules-of-origin and transshipments. The temporary nature of tariff exemptions for sectors like electronics and semiconductors adds to this uncertainty. Cambodia, along with Vietnam, China, the Philippines, Thailand, Malaysia, and Indonesia, is identified as being particularly vulnerable due to high exposure to U.S. markets.
On a positive note, the World Bank reports that the private sector's adaptability to higher trade barriers is expected to enhance growth and mitigate the impact of slower exports. Furthermore, increased investment in technology and the adoption of artificial intelligence could stimulate export demand. The bank has found some evidence suggesting that automation is increasing manufacturing jobs and wages in some Asia-Pacific economies. Economies with high AI preparedness, such as China, Malaysia, Thailand, Indonesia, the Philippines, and Vietnam, may benefit significantly from productivity gains induced by AI.