Cambodia has sustained an average growth rate of 8% according to the World Bank, making it one of the world’s fastest-growing economies. The drivers of Cambodia’s economy – tourism, manufacturing exports and construction – have been significantly impacted by COVID-19. The Asian Development Bank (ADB) estimates a 4% contraction of GDP in 2020. However, with careful management of its borders, Cambodia has kept infection rates and deaths relatively low with ADB forecasting growth of 5.9% this year.

Cambodia is the 10th member of ASEAN, having joined and has benefited from an increase in regional trade volumes as part of the ASEAN Free Trade Area and with ASEAN’s external economic partners. Cambodia is regarded as an investment-friendly destination, due to its geographical advantages, membership of ASEAN and the World Trade Organisation, and its open market policies. Cambodia will be Chair of ASEAN in 2022.

Over the past 20 years, Cambodia has seen an increase of FDI from China, Japan, South Korea, Malaysia, Thailand and Vietnam. There has also been significant investment from the US and the European Union. Investment has flowed mainly into infrastructure, the garment industry and the tourism sector. The garment and tourism sectors have been significantly impacted by pandemic due to reduced global demand and the inability to travel.