Asia-Pacific economies will bounce back this year after global trade started to recover in the fourth quarter of 2021, according to Moody’s Analytics, with Cambodia’s growth rising as high as 6 percent helped by a tourism revival and rising exports.
Uncertainties remain due to the continued impact of the Coronavirus pandemic but Covid-related volatility will diminish over time, according to Chief APAC Economist Steve Cochrane.
Regional growth slowed to an annualised 1.8 percent in the third quarter of last year but rebounded in Q4 after Coronavirus cases peaked.
“The pattern of rapid rise and an equally rapid fall of Omicron’s wave elsewhere illustrates that any impact in APAC will also be of shorter duration and less severity than the Delta wave of last year’s third quarter. So far steep surges of Covid-19 cases driven by the Omicron wave are evident in Australia and the Philippines,” Cochrane said.
Cambodia’s economy will accelerate to 5.8 percent this year after estimated gross domestic product (GDP) growth of 2.9 percent last year, he said.
“The economic outlook for Cambodia is positive as the pandemic situation remains favourable. Despite the Omicron variant and a gradual reopening of its economy, the rate of daily new infections in the nation remains one of the lowest in the region. It is also commendable that Cambodia’s fully vaccinated rate has consistently been the highest in the Asia-Pacific region. The nation is in an advantageous position for future virus waves as it recently started implementing its fourth dose of vaccination,” Cochrane said.
Cambodia has fully-vaccinated 81 percent of the population, according to Ourworldindata.org, behind only Singapore at 87 percent and China at 85 percent in the region.
Cambodia’s economic performance this year may even top the 5.8 percent forecast, according to Cochrane.
“Consumption and retail spending will recover stronger in 2022 and 2023 from tourism growth, as the nation has reopened its international borders to fully vaccinated travellers since November last year,” he said. “Given that the average GDP growth rate in the past decade before the pandemic struck has been trending at around 7 percent, a GDP growth rate near 6 percent this year is achievable as tourism spending gradually improves.”
Cambodia’s export growth will also rebound strongly in the near term, Cochrane said, helped by sustained demand from China for the country’s agriculture exports
“Export gains in the next two years will also be bolstered by rising shipments of durable goods to the US, Cambodia’s largest export destination. Cambodia’s trade prospects in the longer term remain solid with the ratification of RCEP [the Regional Comprehensive Economic Partnership] and the China-Cambodia FTA [free trade agreement] that will provide preferential market access and transfer of production technology for the economy,” he said.
RCEP came into effect at the start of the year, along with the Cambodia-China FTA. RCEP is the world’s largest trading bloc, including the ten ASEAN members, along with China, South Korea, Japan, Australia and New Zealand. It accounts for 30 percent of the world’s population, GDP and trade.
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