Economic overview
Over the past two decades, Cambodia has overcome its history of isolation and conflict and achieved steady growth. Tourism and garment manufacturing are major economic drivers. Political tensions linked to last year’s national elections hampered growth earlier this year, but the strife has largely diminished. Earlier this year, workers staged wage protests. But that tension eased, too, following an increase in the minimum monthly wage for garment workers. The Asian Development Bank reported shipments of garments and footwear out of Cambodia rose by 14.5% in the first half of the year, and total merchandise exports expanded by 20%. But growth was not as robust as it was during the same period last year. The Asian Development Bank forecasts that Cambodia’s gross domestic product will grow 7% this year and pick up more in 2015.
Business travel industry insight
International flights go through airports in Cambodia’s two major cities: Phnom Penh and Siem Reap. The official currency in Cambodia is the riel, but U.S. dollars are accepted everywhere. Stores often display prices in both dollars and riels. Bring small bills; shopkeepers often will not accept U.S. currency over $20. And make sure your cash is not torn or discolored. Many businesses only will accept clean bills in good condition. You’ll find ATMs in Phnom Penh and Siem Reap. Hotels, higher-end restaurants and shops in the cities generally accept credit cards.
Opportunities
- Garment manufacturing for brands such as Nike and Gap has led to a boom in Cambodia’s major cities and yielded a growing consumer class.
- Foreign direct investment grew from $2.65 billion in 2007 to as high as $10.8 billion in subsequent years, according to Cambodia’s investment board.
- The World Bank reports Cambodia has made good strides in improving children’s health and education. The number of deaths per 100,000 live births decreased from 472 in 2005 to 206 in 2010; the under-five child mortality rate decreased from 124 per 1,000 live births in 1998 to 54 per 1,000 in 2010; and the net primary school admission rate increased from 81% in 2001 to 94.3% in 2012.
Challenges
- Cambodia continues to face development challenges, including effective land and natural resource management, environmental sustainability and good governance. Corruption and weak public services constrain development, the World Bank reports.
- The growth of Cambodia’s tourism industry slowed this year, largely because less tourist traffic came into the country from neighboring Thailand. Tourist arrivals to Cambodia rose by 5.2% to 2.2 million in the first half of 2014, compared to a 19.1% rise in the year-earlier period, according to the Asian Development Bank.
- Inflation averaged 4.4% in the first six months of the year, driven up mainly by higher food prices.
When your business expands into new markets, BCD Travel can get your travelers where they need to be. Talk to your account manager about how we can support your company’s growth across the globe.
