Logo of Phnom Penh Post newspaper Phnom Penh Post - Amro projects 2.8% economic growth in Cambodia for 2021

Amro projects 2.8% economic growth in Cambodia for 2021

Content image - Phnom Penh Post
Singapore-based ASEAN Plus Three Macroeconomic Research Office (Amro) has pinned the Kingdom’s economic growth for this year at 2.8 per cent. Heng Chivoan

Amro projects 2.8% economic growth in Cambodia for 2021

Singapore-based ASEAN Plus Three Macroeconomic Research Office (Amro) has forecast Cambodia’s economic growth at a moderate 2.8 per cent in 2021, tempered by uneven growth across sectors.

This projection is more upbeat than than the International Monetary Fund’s (IMF) 2.2 per cent and Asian Development Bank’s 1.9 per cent.

In its 2021 Annual Consultation Report on Cambodia released on November 22, Amro said: “Strengthening pandemic management and implementing flexible policies to support vulnerable sectors and put the economy on a firmer recovery path remain vital, while the ongoing fast rollout of vaccines will ensure a steady economic reopening.

“The recovery momentum is dampened by the slow return of international tourists, despite easing containment measures,” it said.

It noted that amid improvements in the public health system, “Cambodia’s high reliance on close contact services sector and a labour-intensive manufacturing sector renders its recovery more vulnerable to Covid-19 outbreaks”.

Early last month, the IMF presaged that Cambodia economic growth would rise “gradually to pre-crisis rates of 6.5 per cent after a few years”.

The Washington-based development lender underlined that the Covid-19 crisis triggered a sharp fall in external demand last year that dragged down the economy, and that the Kingdom’s third coronavirus outbreak in 2021 – dubbed the “February 20 community event” marking the date it was first detected – further added to the woes.

The IMF noted that the Kingdom’s economy has sustained devastating Covid blows despite sweeping government safeguards, contracting by an estimated 3.1 per cent last year, following a decade of growth averaging around seven per cent each year.

“Although activity showed signs of picking up toward the end of 2020, the rapid spread of the virus from February this year has set the economy back again. As in many other countries, the crisis has strained the ability of households and firms to service loans.

Meanwhile, Amro argued that risks in the financial sector could derive from a deterioration in credit quality and possible asset price inflation, and that Covid could leave long-term scars on the Kingdom’s growth potential, impeding a rapid return to sustainable high growth.

“Given the slow and uneven recovery in an environment of high uncertainty, more targeted and flexible fiscal policy support is required,” it said. “As demand for liquidity remains high, accommodative policy measures should continue while enhancing the monitoring and supervision of the financial system.”

Amro recommended that the National Bank of Cambodia ensure that the unwinding of extraordinary measures is well-communicated to reduce policy uncertainties.

Coordinated efforts to address structural constraints should be accelerated to boost competitiveness and resilience of the economy, it advised.

MOST VIEWED

  • Chinese group tours return to Cambodia starting Feb 6

    Cambodia is among 20 countries selected by Beijing for a pilot programme allowing travel agencies to provide international group tours as well as flight and hotel packages to Chinese citizens, following a three-year ban. As the days tick down until the programme kicks off on February 6,

  • Capital-Poipet express rail project making headway

    The preliminary results of a feasibility study to upgrade the Phnom Penh-Poipet railway into Cambodia’s first express railway indicate that the project would cost more than $4 billion and would take around four years to complete. The study was carried out by China Road and

  • Thai boxers to join SEA Games’ Kun Khmer event

    The Cambodian SEA Games Organising Committee (CAMSOC) – together with the Kun Khmer International Federation (KKIF) and Khmer Boxing Federation – have achieved a “great success” by including Kun Khmer in the upcoming biennial multi-sports event on its home soil for the first time, said a senior

  • Bullets to bracelets: Siem Reap man makes waste from war wearable

    Jewellery is often made from valuable gemstones like emeralds or diamonds and precious metals like gold or silver, or valueless things like animal horns. But a man in Siem Reap has approached the manufacture of delicate pieces from a different angle. His unique form of

  • 61% of 2022 imports came from just 3 markets

    The three largest exporters to Cambodia – mainland China, Vietnam and Thailand – accounted for 60.94 per cent of the Kingdom’s total merchandise imports last year, at $18.245 billion, which was up 11.99 per cent over 2021, according to the General Department of Customs and Excise. Cambodia’s total imports

  • CPP sets out five primary strategic goals for 2023-28

    The Cambodian People’s Party (CPP) on January 29 concluded its two-day extraordinary congress, setting the party’s priority goals for 2023-2028. The ruling party’s congress was attended by more than 3,000 members from across the Kingdom, including the members of the permanent and central committees,