Cambodia’s economic growth is projected at 7.2 percent in 2013, pickingup to 7.5 percent next year as recovery in Europe and the US takeshold, the Asian Development Bank (ADB) said in a report issued on April9.

Private consumption, exports and investment, including strongand diversified foreign direct investment, will all drive economicdevelopment in 2013 and 2014, the Cambodian News Agency AKP quoted thereport as saying.

The country’s industry is expected to expand by10.5 percent in 2013, as European demand for Cambodian products isexpected to grow steadily, supported by duty-free access to the Europeanmarket, ADB further said.

Shipments of garments and footwear to the US will likely be subdued this year but should pick up after that, it added.

Accordingto the report, net foreign direct investment inflows surged by anestimated 75 percent in 2012, to 1.5 billion USD, funding new industriesincluding automotive parts, electronics, and processing of agriculturalproducts.

The services sector is expected to grow by about 7percent, with strong growth in tourism and real estate activity, whileagriculture will likely grow by 4 percent.

Inflation is forecastto average about 3 percent in 2013, it said, adding that robust domesticdemand is expected to result in higher inflation of 3.5 percent nextyear.

However, the report warns that while Cambodia’s growthprospects remain positive, chronic poor health and malnutrition isstunting the growth of 40 percent of Cambodian children.

Leftunaddressed, Cambodia’s continuing high incidence of child malnutritionwill negatively affect future productivity and economic growth due tothe associated irreversible long-term damage to physical and cognitivedevelopment, it said.-VNA