In its latest regional annual report, the ASEAN+3 Macroeconomic Research Office (Amro) said it is expecting to see a slight slump among in the region including the three tech giants South Korea, Japan, and China. The slowdown will impact Cambodia's export sector.
According to the Khmer Times, the agency's forecast of the ASEAN+3 region's economic growth went down to 5.1 percent from 5.3 percent in 2018. Furthermore, Amro experts said Cambodian exports will most likely be affected by the slowdown.
Cambodia won't be the only country to feel the potential consequences of the ASEAN+3 region's small slump. Amro's Global Risk Map suggested that global trade tensions will weigh heavily on international growth due to weaker capital expenditure.
Aside from global tensions affecting the region's economic development, Amro Director Junhong Chang said structural challenges will come in the way of ASEAN+3 member nations. Missteps in handling these headwinds could hamper growth, she warned.
Amro's latest statements echoed the World Bank's comments earlier this week, suggesting that Cambodian export figures to the European Union (EU) are expected to decline in the coming years.
Economists pointed out that the decline has been attributed to EU tariffs slapped unto Cambodian rice imports earlier this year, Eleven Myanmar reported. With Myanmar, Cambodia has tried to thwart the EU's decision but so far, the bloc retained its move.
To help curb the negative impact of the EU's rice tariffs, the World Bank said Cambodia should implement reforms within its investment climate. The government should reduce business costs to help entice foreign investors.
"Growing evidence highlights that investment in people [is] essential to drive economic progress and sustainable development," World Bank country manager for Cambodia, Inguna Dobraja, said.
Dobraja added that the Cambodian government should invest in "improving the quality" of the country's human capital so it can achieve an upper-middle income economy by the next decade.
Amid the EU's trade tensions with Cambodia, the United Kingdom pledged to retain its strong cooperation with the Asian country. According to Pulse News, trade between the two countries exceeded $1 billion in 2018.
The developments came amid the U.K.'s bid to exit the bloc this year. The British government has been working to establish stronger ties with other countries as it seeks independence from the EU.
Ministry of Commerce spokesman Seang Thay said on Wednesday that Cambodia is expecting to add the U.K. in its growing list of export markets. It has yet to be officially announced if Britain will continue to offer exchange opportunities for the Kingdom after Brexit but analysts are expecting cooperation to be retained.