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

  • Omicron patients can stay home: PM

    The Ministry of Health has issued a directive on the treatment of people who have tested positive for the highly transmissible Omicron coronavirus variant, following a suggestion from Prime Minister Hun Sen on the night of January 21. The directive permits home quarantine for those who

  • The effects of the USD interest rate hike on Cambodian economy

    Experts weigh in on the effect of a potential interest rate expansion by the US Federal Reserve on a highly dollarised Cambodia Anticipation of the US Federal Reserve’s interest rate hike in March is putting developing economies on edge, a recent blog post by

  • Cambodia’s first ever anime festival kicks off Jan 22 at capital’s F3 centre

    Phnom Penh's first ever Anime Festival will bring together fans, artists, shops and other local businesses with ties to the Japanese animation style for cosplay competitions, online games, pop-up shops and more on January 22, with Friends Futures Factory (F3) hosting. F3 is a project that

  • Hun Sen gets 4th Covid shot, urges compatriots to follow

    Prime Minister Hun Sen and his wife Bun Rany on January 14 received their fourth dose of Covid-19 vaccine and called on compatriots to follow suit as the Omicron coronavirus variant continues to spread in the community. This marks the launch of Cambodia's fourth-dose vaccination campaign,

  • Fourth dose Covid booster drive jabs 43K in two days

    In the first two days of the fourth-dose Covid-19 vaccination campaign, more than 43,000 people volunteered to get the jabs, while over 4.6 million people have received a third shot. Health ministry spokeswoman Or Vandine said that fourth-dose vaccinations, which began on January 14 exclusively with the Pfizer

  • Singapore backs Cambodia's efforts on Myanmar

    Singaporean Prime Minister Lee Hsien Loong supports Cambodia in its efforts to seek a solution to the ongoing Myanmar crisis as the chair of ASEAN. Lee expressed his support during a meeting with Prime Minister Hun Sen via videoconference on January 14, with the talks focused