Cambodia’s economic growth is expected to end with a healthy growth rate by 2022, but below the growth projected early this year. The lowering of growth estimates is due to the Russia-Ukraine conflict and the uncertainty in China’s economic growth.
The new Cambodia’s economic growth figure was unveiled in a meeting on Cambodia’s Economic Development and Outlook held last Friday. The meeting was chaired by Vongsey Vissoth, Minister Attached to the Prime Minister, and Permanent Secretary of State of Ministry of Economy and Finance with representatives from development partners, including the Asian Development Bank, World Bank, and International Monetary Fund.
In the meeting, Vissoth said that based on the last evaluation, Cambodia’s economic growth this year is projected to be at 5.2-5.4 percent, below the 5.6 percent projected early this year.
Based on the latest preliminary evaluation by the Ministry of Economy and Finance, Cambodia’s economic growth in 2022 is projected to continue to pick up, driven by growth in domestic economic activity, including production, services and general consumption, interest rates, the highly vaccinated population across the country, allowing for the full socio-economic activity to reopen, he said.
“However, the recovery of Cambodia’s economic growth in 2022 is expected to increase by about 5.2 percent to 5.4 percent, lower than the forecast for early 2022 is 5.6 percent due to the impact of rising inflation caused by the war between Russia and Ukraine, the slowdown in China’s economic growth and the continued tightening of China’s borders. These factors have added to the uncertainty of the flow of foreign investment and capital to Cambodia,” Visoth said.
Regarding this situation, Visoth emphasised the importance of focusing on short-term and medium-term policies related to attracting investment, especially to sectors that can contribute to job creation, maximising the benefits of price increases, agricultural products, stabilising market prices, reducing logistics costs and developing skills, in line with the 3Rs (reduce, reuse and recycle) approach of the Strategic framework and programs for economic recovery and to promote Cambodia’s economic growth in living with COVID-19 in the new normal for 2021-2023.
The Asia Development Bank (ADB) predicted in April that Cambodia’s economic growth to reach 5.3 percent in 2022 thanks to strong merchandise exports, and foreign direct investment inflows.
The World Bank projected that Cambodia’s economy is projected to grow 4.5 percent in 2022, up from 3 percent last year, and over the medium term, the economy is expected to trend back to potential, growing at around 6 percent.
This article was first published in Khmer Times. All contents and images are copyright to their respective owners and sources.