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Cambodia's Main Page

The Cambodian Economy

 

 

 

 

 

 

 


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Economy - overview:
From 2004 to 2007, the economy grew about 10% per year, driven largely by an expansion in the garment sector, construction, agriculture, and tourism. GDP dropped to below 7% growth in 2008 and probably contracted in 2009 as a result of the global economic slowdown. With the January 2005 expiration of a WTO Agreement on Textiles and Clothing, Cambodian textile producers were forced to compete directly with lower-priced countries such as China, India, Vietnam, and Bangladesh. The garment industry currently employs more than 280,000 people -about 5% of the work force - and contributes more than 70% of Cambodia's exports. In 2005, exploitable oil deposits were found beneath Cambodia's territorial waters, representing a new revenue stream for the government if commercial extraction begins. Mining also is attracting significant investor interest, particularly in the northern parts of the country. The government has said opportunities exist for mining bauxite, gold, iron and gems. In 2006, a US-Cambodia bilateral Trade and Investment Framework Agreement (TIFA) was signed, and several rounds of discussions have been held since 2007. Rubber exports increased about 25% in 2009 due to rising global demand. The tourism industry has continued to grow rapidly, with foreign arrivals exceeding 2 million per year in 2007-08, however, economic troubles abroad dampened growth in 2009. The global financial crisis is weakening demand for Cambodian exports, and construction is declining due to a shortage of credit. The long-term development of the economy remains a daunting challenge. The Cambodian government is working with bilateral and multilateral donors, including the World Bank and IMF, to address the country's many pressing needs. The major economic challenge for Cambodia over the next decade will be fashioning an economic environment in which the private sector can create enough jobs to handle Cambodia's demographic imbalance. More than 50% of the population is less than 21 years old. The population lacks education and productive skills, particularly in the poverty-ridden countryside, which suffers from an almost total lack of basic infrastructure.
GDP (purchasing power parity):
$28.09 billion (2009 est.)
country comparison to the world: 109
$28.34 billion (2008 est.)
$26.99 billion (2007 est.)
note: data are in 2009 US dollars
GDP (official exchange rate):
$11.03 billion (2009 est.)
GDP - real growth rate:
-0.9% (2009 est.)
country comparison to the world: 123
6.7% (2008 est.)
10.2% (2007 est.)
GDP - per capita (PPP):
$1,900 (2009 est.)
country comparison to the world: 187
$2,000 (2008 est.)
$1,900 (2007 est.)
note: data are in 2009 US dollars
GDP - composition by sector:
agriculture: 29%
industry: 30%
services: 41% (2007 est.)
Labor force:
8 million (2009 est.)
country comparison to the world: 55
Labor force - by occupation:
agriculture: 67.9%
industry: 12.7%
services: 19.5% (2009 est.)
Unemployment rate:
3.5% (2007 est.)
country comparison to the world: 29
2.5% (2000 est.)
Population below poverty line:
31% (2004)
Household income or consumption by percentage share:
lowest 10%: 3%
highest 10%: 34.2% (2007)
Distribution of family income - Gini index:
43 (2007 est.)
country comparison to the world: 49
40 (2004 est.)
Investment (gross fixed):
20.8% of GDP (2009 est.)
country comparison to the world: 82
Budget:
revenues: $1.185 billion
expenditures: $1.84 billion (2009 est.)
Inflation rate (consumer prices):
-0.7% (2009 est.)
country comparison to the world: 13
25% (2008 est.)
Central bank discount rate:
NA% (31 December 2008)
country comparison to the world: 88
5.25% (31 December 2007)
Commercial bank prime lending rate:
17% (31 December 2009)
country comparison to the world: 41
16.01% (31 December 2008)
Stock of money:
$591.7 million (31 December 2008)
country comparison to the world: 126
$513.6 million (31 December 2007)
Stock of quasi money:
$3.197 billion (31 December 2009)
country comparison to the world: 96
$2.328 billion (31 December 2008)
Stock of domestic credit:
$2.019 billion (31 December 2009)
country comparison to the world: 99
$1.67 billion (31 December 2008)
Market value of publicly traded shares:
$NA
Agriculture - products:
rice, rubber, corn, vegetables, cashews, tapioca, silk
Industries:
tourism, garments, construction, rice milling, fishing, wood and wood products, rubber, cement, gem mining, textiles
Industrial production growth rate:
-6.5% (2009 est.)
country comparison to the world: 121
Electricity - production:
1.273 billion kWh (2007 est.)
country comparison to the world: 142
Electricity - consumption:
1.272 billion kWh (2007 est.)
country comparison to the world: 143
Electricity - exports:
0 kWh (2008 est.)
Electricity - imports:
167 million kWh (2007 est.)
Oil - production:
0 bbl/day (2008 est.)
country comparison to the world: 200
Oil - consumption:
4,000 bbl/day (2008 est.)
country comparison to the world: 174
Oil - exports:
0 bbl/day (2007 est.)
country comparison to the world: 206
Oil - imports:
30,970 bbl/day (2007 est.)
country comparison to the world: 98
Oil - proved reserves:
0 bbl (1 January 2009 est.)
country comparison to the world: 196
Natural gas - production:
0 cu m (2008 est.)
country comparison to the world: 192
Natural gas - consumption:
0 cu m (2008 est.)
country comparison to the world: 202
Natural gas - exports:
0 cu m (2008 est.)
country comparison to the world: 197
Natural gas - imports:
0 cu m (2008 est.)
country comparison to the world: 198
Natural gas - proved reserves:
0 cu m (1 January 2009 est.)
country comparison to the world: 196
Current account balance:
-$1.14 billion (2009 est.)
country comparison to the world: 132
-$1.051 billion (2008 est.)
Exports:
$3.647 billion (2009 est.)
country comparison to the world: 115
$4.708 billion (2008)
Exports - commodities:
clothing, timber, rubber, rice, fish, tobacco, footwear
Exports - partners:
US 54.5%, Germany 7.7%, Canada 5.9%, UK 5.5%, Vietnam 4.5% (2008)
Imports:
$5.44 billion (2009 est.)
country comparison to the world: 107
$6.509 billion (2008)
Imports - commodities:
petroleum products, cigarettes, gold, construction materials, machinery, motor vehicles, pharmaceutical products
Imports - partners:
Thailand 27.1%, Vietnam 19.2%, China 14.7%, Hong Kong 8.2%, Singapore 7%, Taiwan 5.6% (2008)
Reserves of foreign exchange and gold:
$3.289 billion (31 December 2009 est.)
country comparison to the world: 96
$2.641 billion (31 December 2008 est.)
Debt - external:
$4.157 billion (31 December 2009 est.)
country comparison to the world: 109
$4.127 billion (31 December 2008 est.)
Exchange rates:
riels (KHR) per US dollar - 4,135.39 (2009), 4,070.94 (2008), 4,006 (2007), 4,103 (2006), 4,092.5 (2005)

 

One of the world's poorest countries, the majority of Cambodia's population (about 74%) is employed in agriculture.  The Khmer Rouge regime (1975-1979) nationalized the production process and collectivized agriculture and carried out its four year plan, which was unsuccessful for many reasons.

The regime depleted the work force by executing those thought to be enemies of the regime and brutally enforcing the plan by overworking, mistreating and abusing the population.  Many Cambodian's died from misdiagnosed illnesses and malnutrition.  With the civil unrest, Cambodia's already weak economy was essentially destroyed.  

Even by 1995, the economy on average was performing much lower than its capacity before 1970.  After the Khmer Rouge was overthrown in 1979, many people returned to being subsistence farmers.  An improvement in the economy was gradually observed, and by the mid-1990s, small amounts of rice were exported as Cambodia had become self-sufficient in rice production again. 

In 1997, agriculture contributed to 51 percent of Cambodia's GDP, with rice being the most important crop.  With rice being a staple in their diet as well, over half of cultivated land is planted with rice.  An important natural resource for Cambodians, fish is an important part of their diet as well.  The Tonle Sap is a great source of freshwater fish for Cambodians, with the main types caught are perch, carp, lungfish and smelt.

Cambodia's per capita income is rapidly increasing, but is low compared with other countries in the region. Most rural households depend on agriculture and its related sub-sectors. Rice, fish, timber, garments and rubber are Cambodia's major exports. The International Rice Research Institute (IRRI) reintroduced more than 750 traditional rice varieties to Cambodia from its rice seed bank in the Philippines. These varieties had been collected in the 1960s.

In 1987, the Australian government funded IRRI to assist Cambodia to improve its rice production. By 2000, Cambodia was once again self-sufficient in rice. However, few Cambodian farmers grow other crops leaving them vulnerable to crop failure. In recent years, various international aid organisations have begun crop diversification programs to encourage farmers to grow other crops.

The recovery of Cambodia's economy slowed dramatically in 199798, because of the regional economic crisis, civil violence, and political infighting. Foreign investment and tourism also fell off drastically. Since then however, growth has been steady. In 1999, the first full year of peace in 30 years, progress was made on economic reforms and growth resumed at 5.0%.

Despite severe flooding, GDP grew at 5.0% in 2000, 6.3% in 2001, and 5.2% in 2002. Tourism was Cambodia's fastest growing industry, with arrivals increasing from 219,000 in 1997 to 1,055,000 in 2004. During 2003 and 2004 the growth rate remained steady at 5.0%, while in 2004 inflation was at 1.7% and exports at $1.6 billion USD. As of 2005, GDP per capita in PPP terms was $2,200, which ranked 178th (out of 233) countries.


Prasat Angkor Wat, the biggest tourist draw of Cambodia

The older population often lacks education, particularly in the countryside, which suffers from a lack of basic infrastructure. Fear of renewed political instability and corruption within the government discourage foreign investment and delay foreign aid, although there has been significant assistance from bilateral and multilateral donors. Donors pledged $504 million to the country in 2004,] while the Asian Development Bank alone has provided $850 million in loans, grants, and technical assistance.

The tourism industry is the country's second-greatest source of hard currency after the textile industry. Between January and December 2007, visitor arrivals were 2.0 million, an increase of 18.5% over the same period in 2006. Most visitors (51%) arrived through Siem Reap with the remainder (49%) through Phnom Penh and other destinations. Other tourist destinations include Sihanoukville in the south east which has several popular beaches, and the area around Kampot and Kep including the Bokor Hill Station.

 

 
 
 
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