Cambodia has experienced rapid economic growth over the last decade; GDP grew at an average rate of over 8% per year between 2000 and 2010, and at 7% since 2011. These statistics place Cambodia as the 6^th fastest economy in the world. Cambodia’s economic growth has been driven by 4 key sectors: tourism, garments, construction & real estate, and agriculture. This rapid growth is set to continue. Predicting a recovery from the economic recession due to COVID-19, the Asian Development Bank forecasts high growth rates in the Cambodian economy for 2021, at 5.9%.   

Traditionally, this growth has been underpinned by the export-oriented garment and footwear sectors (which today represent around 70% of total exports). However, although garment and footwear will remain pivotal sectors, future GDP growth is expected to be less reliant on them. Increased domestic revenue generation through more robust taxation, a push towards SME formalisation, and a diversification of Cambodia’s manufacturing base towards other sectors (electronics, bicycles, agro-processing) are hoped to support the Kingdoms future growth. Indeed, Promising investments have already occurred in this direction with the opening of several electronics factories for brands such as Nintendo supplier, Minebea Mitsumi Inc. 

Today Cambodia has a population of around 16 million. Demonstrating the importance of Cambodia’s pivotal sectors, around 800,000 people (90% are women), are employed in the garment and footwear sectors, 620,000 are employed in Tourism, and another 2.8 million are employed in agricultural roles. Cambodia still remains a predominantly rural country with 76% of the total population living in rural areas – but this is set to change. The kingdom is experiencing a rapid urbanisation (around 3.3% per year) and the population is increasing (1.5% increase in 2018).

In 2016, the World Bank formally reclassified Cambodia as a lower middle-income country as a result of successive years of economic development, supported by the introduction of pro-business policies to promote trade and foreign investment. Pro-business reforms are expected to continue in 2020, and the European businesses present remain optimistic towards their opportunities here.