The garment industry, the single largest foreign exchange earner, grew by 25 percent in 2004, with 65 percent of shipments to the United States, 29 percent to the European Union and 6 percent to other markets.

''Total garment exports during the first half of 2005 reached

$820 million, rising by 1.4 percent in nominal terms over the same period in 2004,'' the statement said.

The sector absorbs the most labor in Cambodia, with about 230,000 workers being employed in more than 200 garment factories across the country.

The World Bank warned, however, that despite the continued expansion of Cambodia's garment exports, soaring oil prices in 2004-2005 have led to deterioration in the country's terms-of-trade as the cost of oil imports has risen considerably.

And after years of civil strife and political turmoil, a booming construction industry is also a source of economic growth.

''The construction sector contributed 10.4 percent to economic growth in 2004. Growth of residential construction in Phnom Penh was remarkably strong in 2004, rising by 31 percent over 2003, and commercial construction also increased markedly,'' the bank said.

''Growth in the construction sector is projected to remain strong in 2005 at about 11 percent.''

Still, poverty in Cambodia remains a concern.

''Although it is hard to draw firm conclusions with regard to trends in the country as a whole given the lack of a nationally representative baseline in 1993-94, backward projection suggests that poverty in Cambodia fell from about 47 percent in 1993-94 to 35 percent in 2004,'' the bank said.