Cambodia Economy`

By: EconomyWatch Content   Date: 11 March 2010

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Cambodia is a South East Asian country, characterized by a developing economy. With an area of approximately 181,035 square kilometers and a population of over 14 million, Cambodia’s economy is primarily agriculture based. The country borders Thailand, Vietnam and Laos. The densely populated plains are dedicated to rice and are the heartland of Cambodia.

 

In 2005, oil and natural gas reservoirs were found under Cambodia’s territorial waters and commercial extraction is expected to begin in 2011. Cambodia’s economy can thus expect an impetus that it has long been awaited.

 

Tourism is the second most contributing industry, besides agriculture, and adds a substantial amount to the Cambodian GDP. The country has a history of regional economic crises, political infighting and civil violence that ended in 1999. There was a dramatic slump in the economy during 1997-98. Tourism and foreign investment faced a major set back at this time. Cambodia’s economy resumed growth at 5.0% in 1999 and 2000, despite severe flooding. The economic grew at 6.3% in 2001 and 5.2% in 2002. Owing to remarkable expansion in the agriculture, garment, tourism and construction sectors, the Cambodian economy saw substantial 10% growth per year from 2004 to 2007.

 

The global economic recession of 2008 brought down the growth rate to below 7%. The per capita income of Cambodia is increasing swiftly but is lower than that of its various neighboring countries.

 

With over half of the population aged below 21, the economy suffers from high demographic imbalance. The level of education and productive skills are extremely low especially in the downtrodden countryside. Many areas experience a complete lack of basic infrastructure.

 

Cambodian Economic Profile: Highlights

Here are some of the highlights of Cambodia’s economy: 

  • GDP (purchasing power parity):

    • $27.92 billion (2009 est.)

    • $28.34 billion (2008 est.)

    • $26.99 billion (2007 est.)

 

        GDP (official exchange rate): $10.9 billion (2009 est.)

        GDP growth 10.3% (2008 est.)

 

       GDP - per capita (PPP):

    • $1,900 (2009 est.)

    • $2,000 (2008 est.)

    • $1,900 (2007 est.)

 

        Unemployment rate:

  • 3.5% (2007 est.)

  • 2.5% (2000 est.) 

  • Population below poverty line: 35% (2004)

 

        Inflation rate (consumer prices):

    • -1% (2009 est.)

    • 25% (2008 est.)

Cambodia Economy: Growth Efforts

Cambodia has identified job creation as its major challenge in the coming decade. It is now trying to establish an economic environment to enable the private sector to create enough jobs to bring some balance in the country’s demography. In order to fulfill its major requirement, the Cambodian government has approached the World Bank, IMF and other bilateral and multilateral donors. By the end of the first decade of the 21st century, various international aid organizations are helping farmers to adopt crop diversification. However, corruption and instability at the political level discourage donors and foreign investment.

 

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