PHNOM PENH, Oct. 8 (Xinhua) -- The World Bank on Tuesday lowered its 2024 economic growth forecast for Cambodia to 5.3 percent from its April prediction of 5.8 percent.
The Southeast Asian country's growth traditionally relies on garment export, tourism, agriculture, as well as construction and real estate.
In its East Asia and Pacific Economic Update, the World Bank said Cambodia's goods export growth is positive this year, as tourist arrivals return to pre-pandemic numbers.
Construction and real estate activities remain subdued.
"Cambodia is experiencing a strong deceleration in credit growth and deteriorating asset quality, much of which is related to the real estate sector," the report said.
The report added that non-performing loans reached a record high of 5.3 percent in 2023, up from 1.9 percent in 2021.
"This increase is attributed to the phasing out of pandemic-related forbearance measures, higher interest rates, elevated debt levels, and slower economic recovery," it said.
Additionally, credit growth slowed to 3.9 percent in 2023, the lowest in two decades, with a high concentration of credit to real estate-related exposures, 32.5 percent of the banking sector's loan portfolio, the report said.
Hoe Ee Khor, chief economist of the ASEAN+3 Macroeconomic Research Office, said the construction sector may experience a slower recovery pace, with growth potentially falling short of pre-pandemic levels due to the prolonged real estate downturn.
"The boost in infrastructure investment will partially offset the weakness in the real estate sector," he told Xinhua in a recent email. ■
