Cambodia is a developing market economy that grew at an average rate of over seven percent in the last decade, driven largely by an expansion in the garment sector, construction, agriculture, and tourism. In 2014, the economy grew by an estimated seven percent and it is expected to continue to grow at a similar rate over the next two years. Cambodia’s GDP per capita was recorded at US$ 1,485 in 2018. In 2014, the percentage of population living below poverty line was 14 percent, a three percentage decreased from last two years. (Asian Development Bank)
Since Cambodia became the first least-developed country (LDC) to join the World Trade Organization (WTO) in 2004, trade has steadily increased. The United States is one of Cambodia’s largest trading partners. In 2016, approximately 21 percent of Cambodia’s total exports are destined for the United States – primarily garment and footwear products. By October 2018, Cambodia exports to the United States were valued at US$ 3 Billion, while U.S. exports to Cambodia were US$ 360.8 million.
Cambodia‘s rapidly expanding tourism industry is led by the spectacular cultural attraction of Angkor Wat. In 2015, the Angkor Wat temple complex, a UNESCO world heritage site, was voted as the best tourist destination in the world by Lonely Planet and by Trip Advisor in 2017. During the first six months of 2018, the arrival of foreign tourists to Cambodia reached 3 million people, an increase of 12 percent compared to same period in 2017.
It is estimated that international arrivals will reach 7 million annually by 2028. In 2017, annual revenue generated from the sector increased to US$ 3.6 billion.
Despite rapid growth in garments and tourism, Cambodia remains an agrarian society, with over half the population engaged in the agriculture sector. Donors have been a driving force behind the development efforts of Cambodia with financial support accounting for more than 30 percent of the government budget. The United States is one of Cambodia‘s largest donors and official U.S. assistance amounted to around US$122 million in 2014.
Foreign investment in Cambodia, which has increased significantly since 2004, has been led by Asian investors from countries such as China, Japan, South Korea, Malaysia, Thailand, and Vietnam. Approved foreign direct investment proposals by the Council for the Development of Cambodia valued around US$2,424 during the first six months of 2018 (Cambodia Investment Board). The Cambodian government currently offers a generous package of incentives to foreign investors and imposes few restrictions on imports from abroad. Investment incentives available to foreign investors include 100 percent foreign ownership of companies, corporate tax holidays of up to eight years, 20 percent corporate tax rate after the incentive period ends, duty-free import of capital goods, and no restrictions on capital repatriation.
Cambodia joined the International Organization for Standardization (ISO) in 1995 and is also a member of the ASEAN Consultative Committee on Standards and Quality (ACCSQ). Cambodia ratified the ASEAN Framework Agreement on Mutual Recognition Arrangements. It has also signed numerous trade agreements, including the U.S.-Cambodia Trade and Investment Framework Agreement (TIFA) in 2006, which facilitates and promotes greater trade and investment between the two countries and provides a forum to address bilateral trade and investment issues. Two successful meetings were held under the TIFA in 2007 in which the U.S. and Cambodian governments discussed WTO accession requirements, trade facilitation and economic development initiatives, and progress on intellectual property rights. In 2008, several bilateral working level meetings were held to advance the TIFA agenda.
Cambodia offers potential investment opportunities in various sectors including: tourism in both natural and recreational areas; education; construction; household products; agriculture and agribusiness; automotive; energy; retail stores and restaurants; and health care.
- Tourism infrastructure and resorts
- Education services
- Architecture, construction, and engineering services
- Household goods and appliances
- Agribusiness and food processing
- Used cars and automotive parts
- Power generation equipment
- Fast food and beverage franchises
- Pharmaceuticals, medical Supplies, and medical equipment
- Health care services
Cambodia at a Glance
Location: Mainland Southeast Asia between Thailand to the west and north and Vietnam to the east and southeast. It shares a land border with Laos in the northeast.
Land Area: 181,035 sq. km. (69,900 sq. mi.); about the size of Missouri.
Climate: Tropical monsoon with rainy season from June to October, and dry season from November to May.
Population: 16.30 million (2019 estimate)
Languages: Khmer (official) spoken by more than 95 percent of the population; some French still spoken in urban areas; English is the major second language.
Religion: 97 percent Buddhist
Real GDP Growth Rate: 7 percent (2018 Asian Development Bank)
GDP Per Capita: US$ 1,485 ( 2018 International Monetary Fund)
GDP by Sector: Agriculture: 18.1 percent; Industry: 34.9 percent; Construction: 17 percent and Services: 39.4 percent ( 2018 National Bank of Cambodia)
Main Drivers of Exports: Garment products and rice.
Main Economic Drivers: Tourism, Agriculture, Construction, Garment Manufacturing.
Government Type: Multi-party democracy under a constitutional monarchy