Although global economic growth has not yet fully recovered after the Covid-19 crisis, Cambodia continues to attract investors, bringing a continuous inflow of capital, said a recent ministerial report.

According to an annual 2024 report by the Ministry of Industry, Science, Technology and Innovation, by the end of last year, the Kingdom had opened four new special economic zones (SEZ), bringing the total to 30.

The SEZs are spread across 12 of the Kingdom’s capital and provinces, with 9 in Svay Rieng, 5 in Preah Sihanouk, 3 each in Banteay Meanchey, Koh Kong and Kandal, and 1 a piece in Pursat, Kratie, Kampot, Kampong Speu, Kampong Chhnang, Kampong Cham and Phnom Penh.

The number of zones has increased from 21 in 2020 to 23 in 2021, 25 in 2022 and 26 in 2023.

The report detailed that in 2024, 326 new factories opened, while 26 closed their doors.

As of the end of last year, Cambodia had a total of 2,425 large factories, it added.

The ministry emphasised that the seventh-mandate government has highlighted the industrial, scientific, technological and innovation sectors as essential strategic tools to achieve the goals outlined in the first phase of the Pentagonal Strategy and as a driving force for growth, contributing to the Kingdom’s social and economic development.

In 2024, Cambodia’s economy continued to grow, with a 6% increase in GDP, while per capita income rose to $2,713, compared to around $1,917 in 2023.

This growth was supported by key sectors, with the industrial sector continuing to grow at an 8.5% rate in 2024, up from 5% in 2023.

The report noted that based on macroeconomic frameworks, the economy is expected to continue its upward trend – with a projected 6.3% GDP growth – and per capita income is expected to rise to $2,924.

The industrial sector is forecast to continue growing at 8.6%, supported by the continued stability of the garment and non-garment sectors, while the construction sector will maintain moderate growth.

Hong Vanak, an economist at the Royal Academy of Cambodia told The Post on February 28 that the joint increase in factories/enterprises and SEZs demonstrates the Kingdom’s investment potential in all sectors.

He believed this positive trend will likely continue in 2025, with foreign direct investment in Cambodia bringing significant returns, benefiting both domestic factors and export markets.

He explained that the internal factors behind the growth include Cambodia’s political stability, strong economic growth, investor-friendly laws for direct investment, abundant skilled and affordable labour, and excellent geographical location, with solid transportation infrastructure.

External factors include the Kingdom’s large domestic market, trade agreements with many countries and favourable customs duty exemptions for certain export markets.

“With all this potential, Cambodia will certainly be able to attract more investors to open SEZs and factories to manufacture export goods,” he added.

Vongsey Vissoth, Minister in charge of the Council of Ministers, addressed the February 26 closing ceremony of the industry ministry’s annual meeting.

He noted that exports achieved a growth rate of 15.7% in 2024, and that more and more Cambodian products are entering regional and international markets.

The minister emphasised that the Kingdom must strengthen its industrial infrastructure and economic foundations to prepare for the transition from being a less-developed country to a more developed one by the end of 2029.

“Cambodia must enhance the investment environment and increase the ease of doing business to attract both domestic and foreign investments. This includes industries that will transform the manufacturing base, as we prepare to become an alternative manufacturing hub,” he said.

The Cambodia Development Council (CDC) approved 414 investment projects in 2024, an increase of 54% (146 projects) over the 268 approved in 2023.

The total investment value for these 414 projects was approximately $6.9 billion, an increase of 40% over 2023.