Overview

Cambodia continues to enjoy robust growth, albeit at a slightly slower pace. Real growth in 2015 is estimated to have reached 7 percent, compared to 7.1 percent in 2014. The garment sector, together with construction and services, are the main drivers of the economy. Growth is expected to remain strong in 2016, as recovering internal demand and dynamic garment exports offset stagnation in agriculture and softer growth in tourism. Poverty continues to fall in Cambodia, although the pace has declined significantly. The poverty rate was 17.7 percent in 2012, with almost 3 million poor people and over 8.1 million who are near-poor. About 90 percent of them live in the countryside. World Bank estimates suggest that Cambodia achieved the Millennium Development Goal (MDG) of halving poverty in 2009. However, the vast majority of families who escaped poverty were only able to do so by a small margin, thus the significant share of the near-poor. Human development, particularly in the areas of health and education, remains an important challenge and development priority for Cambodia. 32 percent (or approximately 0.5 million) of children under five-years-old are stunted; 82 percent (12.2 million people) of Cambodia’s people do not have access to piped water supply and 63 percent (9.3 million people) do not have access to improved sanitation (2014). Cambodia has made good strides in improving maternal health, early child care, and primary education programs in rural areas. The maternal mortality ratio per 100,000 live births decreased from 472 in 2005 to 170 in 2014, the under-five mortality rate decreased from 83 per 1,000 live births in 2005 to 35 per 1,000 in 2014, and the net primary school admission rate increased from 81 percent in 2001 to 95.3 percent in 2014. Cambodia has also been successful in combating HIV/AIDS, tuberculosis and malaria. HIV prevalence among adults aged 15-49 decreased from 0.9 percent in 2006 to 0.7 percent in 2012. In 2014, 89 percent of active AIDS patients in Cambodia had access to antiretroviral treatment, a rate of coverage that is among the highest in the developing world. Tuberculosis prevalence rate per 100,000 population decreased from 1,230 cases in 2005 to 715 cases in 2013, and tuberculosis case fatality rates declined from 157 to 66 per 100,000 population at the same period. Malaria incidence decreased from 71,814 cases in 2009 to 24,135 cases in 2013, and malaria case fatality rates also decreased dramatically from 219 to 12 in the same period. Cambodia is on its way to achieving its goal of malaria elimination by 2015. In spite of these achievements, Cambodia still faces a number of development challenges, including weak public service delivery which impede inclusive development, ineffective management of land and natural resources, environmental sustainability, and good governance. Underlying the quality, adequacy, and efficiency of public services is the ability of the government to generate additional revenue for important public spending and investment requirements, to spend the available resources efficiently and accountably, and to ensure timely commitments and payments for the operation of vital public services and public investment. Addressing this will help to stimulate the agricultural and tourism sectors to once again become strong engines of growth supporting poverty reduction, as well as to expand and sustain growth and promote diversification in the manufacturing sector.