Search

Search form

Logo of Phnom Penh Post newspaper Phnom Penh Post - Govt muscles down inflation in first fiscal year

Govt muscles down inflation in first fiscal year

Govt muscles down inflation in first fiscal year

T HE Royal Government's first fiscal year performance was this week formally recorded in the National Bank's monetary statistics - by any standards, a "remarkable" set of results, according to financial analysts.

Even the bank allowed that "the economic stablization, namely the reduction of the inflation rate... has been well achieved."

The government, despite the well-publicised sacking of a "maverick" finance minister, has muscled inflation down from 145.7 percent to just 2.3 percent during its first 12 months to September 1994.

The bank notes in its report that the new government wanted to "reconstruct the country in all fields with the aim to stabilize the political, social and economic situation."

The statistics prove in this test, the government seems to have passed with honours.

The inflation rate during the third quarter of this year stood at 3.3 percent, slightly above the first quarterly result (1.5 percent) and the second (2.3 percent).

The bank said that was due to a slight increase in food and clothing prices in September, compared with August.

The average of the CPI during the third quarter was 4,951, an increase of about 700 from the first quarter.

The increase in the average CPI was because the food sub-index increased by about 11 percent. However, the average prices for services and daily items "plunged" and clothing was almost stable, the bank said.

The government can also pride itself on seemingly achieving full control and stability in the foreign exchange rate during the first year.

The official value of the riel compared with the US dollar has barely fluctuated over the twelve months. The biggest movement in the official exchange rate, month by month, was in January 1994 (when 2,470 riel bought $1) to September (2,605).

The bank notes that: "Set against the SDR, the riel has effectively depreciated by 16.4 percent since the end of December 1993."

In the key area of foreign exchange assets, the banks says: "This aggregate has further strengthened since the beginning of the year.

"In September, net foreign assets increased by 15.2 billion riel or 5.8 percent due to an increase of 39.4 billion riel in foreign assets, which was offset by a 24.2 billion riel increase in foreign liabilities".

However, while the formal records of the government's first year were "well-achieved", according to the bank, the rice shortage ravaging the country since those statistics were published are bound to have an adverse economic impact.

RECOMMENDED STORIES

  • Breaking: PM says prominent human rights NGO ‘must close’

    Prime Minister Hun Sen has instructed the Interior Ministry to investigate the Cambodian Center for Human Rights (CCHR) and potentially close it “because they follow foreigners”, appearing to link the rights group to the opposition Cambodia National Rescue Party's purported “revolution”. The CNRP - the

  • Rainsy and Sokha ‘would already be dead’: PM

    Prime Minister Hun Sen on Sunday appeared to suggest he would have assassinated opposition leaders Sam Rainsy and Kem Sokha had he known they were promising to “organise a new government” in the aftermath of the disputed 2013 national elections. In a clip from his speech

  • Massive ceremony at Angkor Wat will show ‘Cambodia not in anarchy’: PM

    Government officials, thousands of monks and Prime Minister Hun Sen himself will hold a massive prayer ceremony at Angkor Wat in early December to highlight the Kingdom’s continuing “peace, independence and political stability”, a spectacle observers said was designed to disguise the deterioration of

  • PM tells workers CNRP is to blame for any sanctions

    In a speech to workers yesterday, Prime Minister Hun Sen pinned the blame for any damage inflicted on Cambodia’s garment industry by potential economic sanctions squarely on the opposition party. “You must remember clearly that if the purchase orders are reduced, it is all