Growth remained strong at 6.9 percent in2016, after 7.0 percent in 2015. Cambodia's economicactivity continues to expand at a robust pace. Constructionremained one of the main drivers of growth. Garment exportseased slightly as the country’s external competitiveness waseroded by US dollar appreciation, rising labor costs andincreasing competition from other regional low-wagecountries. Better weather conditions last year resulted inincreased agricultural production, although agriculturalcommodity prices remain depressed. Real growth is projectedto remain strong, expanding at 6.9 percent in 2017 and 2018,partly underpinned by government spending. Downside risks tothis outlook include the fallout from further rises in USinterest rates, a slower-than-expected economic recovery inEurope, and uncertainties over global trade. Povertyreduction is expected to continue over the next few years,driven mainly by the garment, construction and servicessectors, together with increases in remittances.
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