Market Overview

Economy

Cambodia has been one of the top-performing economies in Asia. As the country emerges from the social and economic effects of the Covid crisis, a rapid return to the high levels of growth seen pre-Covid is now anticipated.

Cambodia has a strong labor protection regime, and while wages are rising with the development of the economy, the country still remains competitive in the region. In response to global trade concerns, the government has introduced a number of measures to reduce production and supply costs and encourage further foreign investment.

Cambodia's GDP dropped by 0.2% in 2020 and is estimated to grow 3.6% for the year 2021 and 10.2% for 2022. The inflation rate was 2.9% in 2020 and is projected to be 2.5% in 2021 and 3.8% in 2022.

Banking System

Limited access to capital is one of the constraints of doing business in Cambodia. Commercial banks are primary sources of funding.

Currency

The local currency, Khmer Riel (KHR), was introduced in 1980. The Cambodian economy is classified as partially dollarized, given that the US dollar circulates in conjunction with an official national currency, as opposed to fully dollarized economies where the dollar is the only legal tender. 80% of deposits and credits in the banking system are made in United States Dollars (US$).

Why Cambodia?

  • ASEAN membership offers regional trade benefits
  • WTO member since 2004 increasing trade integrations
  • Duty free or preferential export access to most developed economies
  • Favorable investment environment
  • One of Asia’s lowest labor costs and a dynamic workforce

Investing in Cambodia | Seize the opportunity

tan-mona

Partner, Tax & Corporate Services

KPMG Cambodia Ltd

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