Phnom Penh, May 18 (IANS): The World Bank on Thursday raised its growth forecast for Cambodia to 5.5 per cent in 2023, up from its earlier projection of 5.2 per cent.

"Driven by pent-up consumer demand and the return of foreign tourists, the overall contribution of the services sector to economic growth is returning to the 2019 levels," Maryam Salim, World Bank country manager for Cambodia, said during the launch of the May 2023 Cambodia Economic Update.

"Meanwhile, the agriculture sector is benefitting from improved access to regional markets, thanks to newly ratified bilateral and regional free trade agreements," she added.

World Bank senior country economist Ly Sodeth said Cambodia's economic recovery strengthened despite weakening global demand, reports Xinhua news agency.

"Initially led by export-oriented manufacturing, growth drivers have evolved to the services and the agriculture sectors," he said at the event.

He said the kingdom's inflation had returned to the pre-Covid levels, at 2.2 per cent in February this year as food and oil prices moderated.

Meanwhile, Sodeth said interest rate increases in the US have pushed up domestic interest rates, curtailing the kingdom's credit growth.

"Domestic credit decelerated sharply, growing at 14.8 per cent year-on-year, a 13-year low in February 2023, well below the 22 per cent growth rate recorded during the same period in 2022," he said.