Cambodia's economic growth is expected at seven per cent in 2017.This will be driven by garment export, construction, tourism and agriculture. With the expected growth, the country's gross domestic product will reach about 22 billion dollars.

Garment exports and construction are forecast to grow by ten per cent and 14 per cent respectively in 2017. Tourism is projected to see strong growth based on the 12 per cent rise in tourist arrivals during the first four months of this year. Cambodia has achieved robust economic growth of 7.7 per cent annually in the last two decades coupled with low and manageable inflation as well as a stable exchange rate.

One of the main challenges to Cambodia’s economy is dollarization. Despite its benefits, dollarization exposes the economy to risks and losses, and especially imposes constraints on monetary policy implementation. Foreign currencies, comprising mainly dollars, accounted for 83 per cent of cash and bank deposits in Cambodia at the end of 2015, up from 56 per cent in 1995.

Continued interest rate hikes in the US may weaken prospects of further capital inflows to Cambodia. Any disruption in global trade flows will have substantial negative impacts on Cambodia, given its high level of dependence on exports, particularly garments and footwear, as one of the main drivers of economic growth.