Cambodia's economy is expected to remain strong through 2016, though it is likely to grow at a slightly slower pace than forecast earlier this year, according to the Asian Development Bank (ADB)'s annual economic outlook on Tuesday.

    The bank's outlook forecasts gross domestic product (GDP) growth for Cambodia of 7 percent for 2015 and 7.2 percent for 2016. In its March report, the bank projected growth of 7.3 percent for 2015 and 7.5 percent for 2016.

    "The moderation reflects softer growth prospects for developing Asia and a slow recovery in the major industrial economies," the bank said in a statement.

    ADB senior economist to Cambodia Jan Hansen said the expansion of garment manufacturing, construction and services--in particular tourism, finance and real estate services--continues to propel growth.

    "Growth in exports and tourism, however, decelerated somewhat in the first half 2015, while agriculture has been affected by prolonged low rainfall," he said.

    He added that domestic demand appears to be holding up well with an expansion of credit to the private sector in May of more than 30 percent year-on-year, as well as high import growth.

    According to the outlook, garment and footwear exports climbed by 11 percent year-on-year, decelerating from 14.5 percent in the first half of 2014.

    The garment industry faces increased competition from the appreciation of the U.S. dollar, and from low-wage competitors including Myanmar, it said, adding that growth of tourist arrivals softened to 4.6 percent in the first half from 5.2 percent a year earlier.

    The bank predicted that the inflation forecast for 2015 has been adjusted to 1.3 percent thanks to a decline in transportation and fuel costs following a sharp fall in oil prices.