Economists and the business community on November 1 welcomed the prime minister’s announcement on the reopening of the country in all sectors and resumption of socio-economic activity.
The keenly-awaited move comes after a hiatus of nearly two years due to the spread of Covid-19, and marks a promising new chapter for the Kingdom’s economic momentum to build up a considerable head of steam, they suggest.
Prime Minister Hun Sen made the announcement earlier on November 1 while addressing the public as he declared the closing of the Covid-19 vaccination campaign for people aged 6 and older, and the launch of the jab drive for children aged 5.
Hong Vanak, director of International Economics at the Royal Academy of Cambodia, told The Post that the move would signal a critical turning point as the economy bounces back from the severe turbulence brought by the Covid-19 crisis.
However, he cautioned that an immediate reopening would not yield significant results until mid-2022, or towards end-2022 if no serious headway is made in the next couple of months.
“Our Cambodian economy will gradually recover, and these steps will bear fruit in 2022. If we start sowing seeds now, they will pay off in spades by mid-2022. Expectations for Cambodia’s gross domestic product [GDP] and macroeconomic growth will remain buoyant,” he said.
Cambodia Chamber of Commerce vice-president Lim Heng underlined that the reopening was eagerly-anticipated not only by business players of all scale, but by government officials.
He told The Post that the move demonstrates the extent of the government’s control over the coronavirus epidemic, which he attributed in part to the relative success of nationwide Covid-19 vaccination campaigns.
Heng explained that the latest outbreak of Covid-19 – first detected on February 20 – and subsequent lockdowns seriously dented business and state revenues, saying tax collection would improve as the economy recovers.
As socio-economic activity picks up, foreign investors will gain renewed confidence and return to the Cambodian market in all sectors, where they can benefit from the recently-promulgated investment law, he asserted.
“This will offer internal and external perks, and is marvellous news that could pique the interests of investors in the ASEAN region and around the world towards investing in the Kingdom,” Heng said.
According to Minister of Economy and Finance Aun Pornmoniroth, the government has revised its economic growth forecast for 2021 to 2.4 per cent, down from 4.0 per cent at the beginning of the year, after a 3.1 per cent contraction in 2020.
He has also pegged Cambodia’s economic growth at 4.8 per cent for 2022, saying that the coronavirus outbreak has eased after widespread vaccination, ushering in the emergence of a ‘new normal’.
