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- GDP (PPP):
- $50.0 billion
- 7.0% growth
- 6.9% 5-year compound annual growth
- $3,263 per capita
- Inflation (CPI):
- FDI Inflow:
Cambodia continues to integrate more fully into the system of global trade and investment. There has been notable reform in the management of public finances, and the trade regime is more open and transparent. In an effort to foster the capital market’s vitality, Cambodia’s Securities and Exchange Commission has eased listing requirements for companies.
Economic Freedom Snapshot
- 2016 Economic Freedom Score: 57.9 (up 0.4 point)
- Economic Freedom Status: Mostly Unfree
- Global Ranking: 112th
- Regional Ranking: 24th in the Asia–Pacific Region
- Notable Successes: Management of Public Finance and Trade Freedom
- Concerns: Rule of Law, Business Freedom, and Financial Freedom
- Overall Score Change Since 2012: +0.3
Between 1975 and 1979, Pol Pot’s Khmer Rouge regime killed an estimated 3 million Cambodians. The Khmer Rouge Tribunal, established under an agreement with the United Nations to prosecute senior officials involved in the atrocities, has been slow to deliver justice. Nominally a democracy, Cambodia has been ruled by former Khmer Rouge member and Vietnamese ally Prime Minister Hun Sen since 1993. The general election victory of Hun Sen’s Cambodian People’s Party in 2013 was hotly contested by the opposition Cambodia National Rescue Party. In July 2014, after Hun Sen promised to initiate electoral reform, both parties agreed to suspend protests and reconvene government. Those reforms have yet to be implemented. Cambodia’s economy remains heavily dependent on tourism and apparel assembly.
Corruption remains a serious obstacle to Cambodia’s economic development and social stability. Increased foreign investment has brought notable economic growth but frequently involves land grabs by powerful politicians, bureaucrats, and military officers. The judiciary is marred by inefficiency, corruption, and a lack of independence. There is a severe shortage of lawyers, and the system’s poorly trained judges are subject to political pressure.
The top individual income and corporate tax rates are 20 percent. Other taxes include an excise tax and a value-added tax. The overall tax burden equals 12.4 percent of total domestic income. Government spending amounts to 20.5 percent of total domestic output, but the budget balance remains under control. Public debt remains below 30 percent of GDP.
Measures to modernize commercial codes, including updated bankruptcy legislation, have been adopted in recent years. Completing licensing requirements still takes more than 100 days. The non-salary cost of employing a worker is low, but many aspects of the labor codes are not enforced effectively. The government enacted rent controls on some properties in 2015, but most prices are determined by the market.
Cambodia has an average tariff rate of 8.9 percent. Foreign investors may not own land. State-owned enterprises distribute electricity and water. A weak judicial system may discourage foreign investment. Despite banking privatizations, the financial sector remains subject to state influence.