PHNOM PENH, Aug. 30 (FN) — Cambodia's economy is forecast to remain robust over the next two years, driven by garment export, construction, and services, according to an Economy and Finance Ministry report released on Tuesday.

The ministry's mid-year macroeconomic report said the gross domestic product (GDP) is forecast to grow by around 7 percent in 2016 and the same rate is expected in 2017.

"The growth for this year and the next will be driven by garment export, construction, and services," Economy and Finance Ministry Secretary of State Vongsey Vissoth said, adding that agriculture is expected to see a slow growth due to severe drought early this year.

According to the report, growth in industry is projected at 11. 4 percent this year, slightly down from 11.7 percent last year, due to a slowdown in construction activities.

Service sector is expected to expand by 6.7 percent, down from the last year's 7.1 percent due to slowing growth of tourist arrivals, it said, adding that agriculture is projected to grow by 0.5 percent.

The report said foreign direct investment (FDI) inflows to Cambodia is forecast to slow down to 7.1 percent in 2016 and 6.9 percent in 2017, from 7.6 percent in 2015.

Annual inflation, after trending down to 1.2 percent in 2015, is likely to edge up to 2.8 percent in 2016 and 3.7 percent in 2017, on the back of an expected turnaround in international oil prices from its last year's unusually low levels.

The report noticed that the country's robust economic outlook for this year and the next could be derailed if China's economy slows down drastically or if international financial market volatility that has been lingering on after the "Brexit" suddenly exacerbates.

"Cambodia's economy has strong economic links to China's economy through official development assistance, FDI flows and tourist arrivals," it said.