The International Monetary Fund (IMF) on Wednesday revised Cambodia’s 2023 economic growth forecast downward from 5.8% to 5.6%. This was announced during an online press conference on the Regional Economic Outlook for Asia and Pacific. The revision is due to decreased demand from U.S. and European markets, as confirmed by the Ministry of Commerce’s report showing a 17.8% year-on-year decrease in exports of garments, footwear, and travel goods. These exports amounted to $8.14 billion in the first three quarters of 2023.
Shanaka Peiris, an official from the IMF, highlighted the Regional Comprehensive Economic Partnership (RCEP), a trade pact involving 15 Asia-Pacific nations including ten ASEAN members and five trading partners, as a factor that could diversify and offer long-term benefits to Cambodia’s economy. The nation’s economy also relies heavily on sectors such as tourism, agriculture, real estate, and construction. The IMF predicts a growth rate of 6.1% for Cambodia in 2024.
The IMF also projected a 4.3% rise in Malaysia’s Gross Domestic Product (GDP) for 2024, up from the projected 4% in 2023. This increase is driven by a surge in global export demand, particularly from the growing tech sector. Peiris underscored Malaysia’s open economy and its significant role in Electrical and Electronics (E&E) exports. He anticipates a gradual global economic recovery and an increase in tech export demand.
While acknowledging slowing inflation in Malaysia, Peiris cautioned about potential risks from subsidy reforms in Budget 2024, labeling it as a one-off event and deeming additional measures from Bank Negara Malaysia (BNM) unnecessary. The IMF recommends a restrictive monetary policy stance to bring inflation down to the targeted 2-3% range, with the current hike in interest rates contributing towards this aim.
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