The economies of Cambodia and Laos are both forecast to remain robust in the short term even as the two Southeast Asian nations face risks arising from the effects of the ongoing slowdown in global trade.
In Cambodia, the economy is expected to stay strong over the next two years, driven by garment exports, construction activities, and services expansion, according to a new Economy and Finance Ministry report.
The ministry’s midyear macroeconomic report projects the country’s gross domestic product (GDP) to grow by around 7% in both 2016 and 2017.
“The growth for this year and the next will be driven by garment export, construction, and services,” Economy and Finance Ministry Secretary of State Vongsey Vissoth said.
The growth in industry is projected at 11.4% this year, slightly down from 11.7% last year, due to a slowdown in construction activities, according to the report.
The service sector is expected to expand by 6.7%, down from the last year’s 7.1%, as a result of slowing growth in tourist arrivals.
Agriculture is projected to grow by a mere 0.5%, the slow progress attributed to the severe drought that hit the country early this year.
Foreign direct investment inflows are predicted to cool down to 7.1% in 2016 and 6.9% in 2017 from a 7.6% growth in 2015.
The report cautioned that the country’s robust economic outlook for this year and the next could be derailed if China’s economy slows down drastically or if international financial market volatility that has been lingering on after “Brexit” suddenly exacerbates.
Laos revises outlook
On the other hand, forecasts for economic growth in Laos for the coming year have been revised down from 7.5% to 7.3%, local media reported.
The economy of the Southeast Asian nation grew by about 6.9% over the past 12 months, but more will need to be done to reach future growth targets in the face of global economic uncertainty, state-run daily Vientiane Times reported.
The revision followed the August monthly meeting of the nation’s executive cabinet chaired by Lao Prime Minister Thongloun Sisoulith last week.
The meeting gave support in principle to the amended Laws on Investment Promotion, Media and Government, with the revised acts expected to be tabled for the consideration of the National Assembly later this year.
Photo: Piseth1
