13-12-2023 (PHNOM PENH) Amidst a solid economic recovery, Cambodia is positioned as the front-runner for foreign direct investment (FDI) in Southeast Asia, with expectations of a robust capital influx in 2024. The International Monetary Fund (IMF) projects the country’s growth to reach 6.1% next year, a testament to its economic resilience.
The annual FDI Standouts Watchlist from FDI Intelligence, the industry analysis division of Financial Times (FT) Group Ltd, identifies Cambodia as a key player in FDI trends. The report evaluates the macroeconomic landscape and FDI patterns of the world’s top 50 FDI destinations, utilizing data from the IMF and fDi Markets. This assessment pinpoints nations poised for a strong start to the new year as the global economy navigates the complexities of a post-pandemic recovery.
In the ranking, Cambodia leads the list, followed by the Philippines, Iraq, Kazakhstan, Azerbaijan, and India. The report notes that Asia performed exceptionally well in this year’s Watchlist, with six countries in the top 10, underscoring the region’s economic resilience. Three African countries—Kenya, Namibia, and Morocco—also feature in the top 10, alongside Serbia as the sole non-Asian and non-African country securing a spot.
Chea Vuthy, deputy secretary-general of the Cambodian Investment Board (CIB) and the Cambodian Special Economic Zone Board (CSEZB) at the Council for the Development of Cambodia (CDC), highlighted the country’s economic potential, peace, security, and political and economic stability. He emphasized the crucial role of the private sector in propelling national economic development.
Vuthy reported that FDI in Cambodia approached $4 billion annually, showcasing resilience even during the challenging times of 2020. Cambodian investors demonstrated confidence in the country’s investment climate and leadership, leading the way in the first half of the year.
China emerged as the largest contributor of FDI in the first two quarters of 2023, accounting for 42.1%, followed by Thailand, Japan, the Cayman Islands, Samoa, South Korea, the British Virgin Islands, Singapore, and Malaysia.
The CDC reported 128 projects valued at $1.3 billion in capital investment for the first six months of 2023, compared to 111 projects worth $3.1 billion during the same period in 2022.
While the IMF adjusted its economic growth forecasts for Asean countries in response to global and regional economic challenges, Cambodia’s revised growth estimates for 2023-24 remain optimistic. Shanaka Peiris, division chief of regional studies at IMF’s Asia and Pacific Department (APD), acknowledged the marginal adjustments and highlighted Cambodia’s increased trade integration with partners, reducing dependency on the US and EU.
The diversification of Cambodia’s economy and commitments under the Regional Comprehensive Economic Partnership (RCEP) are expected to yield medium to long-term benefits, creating an attractive environment for investment and FDI across various sectors. Cambodia stands at the forefront of FDI prospects, offering stability and growth opportunities in the Southeast Asian region.
