Last updated: September 2016
Following more than two decades of strong economic growth, Cambodia has attained the lower-middle-income status as of 2015, with gross national income (GNI) per capita reaching US$1,070. The garment sector, construction, and services have been the main drivers of the economy. Growth is expected to remain strong in 2016, as recovering internal demand and dynamic garment exports slow growth in agriculture and easing construction and tourism activity.
Poverty continues to fall in Cambodia, albeit more slowly than in the past. In 2012, the poverty rate was 17.7 percent. About 90 percent of the poor live in the countryside. While Cambodia has achieved the Millennium Development Goal (MDG) of halving poverty in 2009, the vast majority of families who escaped poverty were only able to do so by a small margin, thus around 8.1 million people are near-poor.
Health and education, remain important challenges and development priorities for Cambodia. 32 percent (or approximately 0.5 million) of children under five are stunted. 79 percent (of 12.3 million people) do not have access to piped water supply and 58 percent (9.3 million people) do not have access to improved sanitation (2015).
Cambodia has made good strides in improving maternal health, early childhood development, and primary education programs in rural areas. The maternal mortality ratio per 100,000 live births decreased from 472 in 2005 to 170 in 2014, the under-five mortality rate decreased from 83 per 1,000 live births in 2005 to 35 per 1,000 in 2014, and the net primary school admission rate increased from 81 percent in 2001 to 95.3 percent in 2014.
In spite of these achievements, Cambodia still faces a number of development challenges, including weak public service delivery, which impede inclusive development, ineffective management of land and natural resources, environmental sustainability, and good governance. Underlying the quality, adequacy, and efficiency of public services is the ability of the government to generate additional revenue for important public spending and investment requirements, to spend the available resources efficiently and accountably, and to ensure timely commitments and payments for the operation of vital public services and public investment. Addressing this will help to stimulate the agricultural and tourism sectors to once again become strong engines of growth supporting poverty reduction, as well as to expand and sustain growth and promote diversification in the manufacturing sector.