Cambodia’s (B2 stable) real gross domestic product (GDP) grew 7.5 percent in 2018, Moody’s says, thanks to increasing exports, robust tourism and continued strong foreign direct investment inflows that supported construction and job creation.
Cambodia’s credit profile reflects robust GDP growth prospects, modest and highly affordable government debt, the credit ratings agency said, citing research into financial system balance, geopolitical risks and institutional framework.
Moody’s expects the country to see continued robust growth, although there are prominent risks, in particular the potential for lost preferential access to the European Union and US, which would weigh on exports and GDP growth.
The agency also said the ongoing strong growth in bank lending – at around double the rate of nominal GDP growth – continues to pose risks to economic and financial stability.
Moody’s conclusions are contained in its just-released credit analysis titled which examines growth in four categories: economic strength, which is assessed as “low”; institutional strength “very low (+)”; fiscal strength “moderate”; and susceptibility to event risk “moderate (+)”.
In its Cambodia Economic Update released earlier this month, the World Bank also said the Cambodian economy expanded by 7.5 percent last year.
The robust growth was driven largely by the rapid expansion of exports and an ongoing construction boom, the World Bank said.