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 $1,070. Driven by garment exportsand tourism, Cambodia has sustained an average growth rate of 7.6% in 1994-2015, ranking sixth in the world. Economic growth is expected to remain strong over the next two years (6.8% in 2017 and 6.9% in 2018) as recovering tourism activity coupled with fiscal expansion compensate for some moderation in garment exports and construction growth.
Poverty continues to fall in Cambodia, albeit more slowly than in the past. In 2014, the poverty rate was 13.5% compared to 47.8% in 2007. About 90% 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. Around 4.5 million people remain near-poor, vulnerable to falling back into poverty when exposed to economic and other external shocks.
Health and education remain both important challenges and development priorities for Cambodia. 32% (or approximately 0.5 million) of children under five are stunted. While net enrollment in primary education increased from 82% in 1997 to 97% in 2016, lower secondary completion rates, at 43% in 2013, are significantly below the average for lower middle-income countries. As of 2015, 70 percent of Cambodia’s population (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.
Cambodia has made good strides in improving maternal health, early childhood development, and primary education 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.
In spite of these achievements, Cambodia still faces a number of development challenges, including the need for good quality public service delivery, inclusive development, better land administration and natural resources management, environmental sustainability, and good governance. Going forward, the success of addressing these challenges will rest not only on maintaining macroeconomic stability and enhancing economic diversification and export competitiveness, but also on improving the quality of public service delivery through more effective public spending that is more responsive to citizens’ needs.