The British business publication fDi Intelligence has just released its latest global index, and Cambodia has taken first place. Why is Cambodia in first place? Because the country is experiencing strong and steady growth in its gross domestic product (GDP), low inflation and a booming foreign direct investment (FDI) sector.
The fDi Intelligence Emerging Markets Index also takes into account factors such as infrastructure development, tax incentives for investors and the overall ability of cities and regions to attract future FDI.
According to the report, Cambodia is on track to achieve GDP growth of 6.1% this year, with an inflation rate of just 3%.
What's more, Cambodia has not been left behind! Cambodia has also seen an impressive 393% increase in FDI capital expenditure and 110% growth in new FDI projects.
The Cambodian government has implemented a series of measures to facilitate the creation of foreign businesses, improve commercial infrastructures and create an attractive environment for private investors.
Cambodia's booming tourism market was also highlighted as an extremely attractive aspect of the market, with the sector experiencing a strong rebound in 2024 and this trend expected to continue.
fDi Intelligence also welcomes Cambodia's impressive progress in economic diversification since 2019, which is a clear indication that the economy is reducing its reliance on traditional trade forces, with garment and footwear exports leading the way.
However, the report notes that non-apparel exports now account for 13% of all exports from 2023, with impressive growth in the production of electronic components and vehicle parts. Compared to previous periods, non-traditional products accounted for just 5% of exports in 2019, which is a significant step forward. While positive overall, the index notes that the Cambodian economy presents some potential risks and challenges in the near future, particularly in the property sector. However, these risks are manageable and the economy is on a solid footing.
If this sector were to lose momentum, there could be repercussions for the banking sector and the economy as a whole, the report points out. However, diversification of investment sources should help to mitigate these risks.
Together, these factors suggest that Cambodia is a prime destination for potential investors in 2024 and beyond! It is also the top emerging market in this international study.
fDi Intelligence is a publication on business news and foreign direct investment (FDI), providing up-to-date analysis of global investment activity.