The Cabinet on October 22 gave the nod to a draft budget of $8.013 billion for public spending in 2022, an increase of 6.8 per cent year-on-year, in a move expected to help power a prompt economic recovery as the Kingdom emerges from the ravages of the Covid-19 health crisis.
The Cambodian economy is projected grow by 2.4 and 4.8 per cent in 2021 and 2022, bringing the gross domestic product (GDP) to around $30.544 billion next year, and GDP per capita to $1,730 and $1,841 in 2021 and 2022, the Council of Ministers, or Cabinet, said in a press release on the minutes of the October 22 Plenary Session.
At 26.24 per cent of gross domestic product (GDP), the total budget comprises $4.701 billion (15.39 per cent of GDP) for current expenditure, up by 9.5 per cent year-on-year, and $3.312 billion (10.84 per cent of GDP) for total planned expenditure, up by 3.2 per cent.
"In this regard, the 2022 budget can be termed as the budget to persevere in the struggle and capacity building activities towards living with Covid-19 under the ‘new normal’, and continue the fight to protect the lives of the people and maintain livelihoods and a socio-economic balance, as well as an orientation of resources to restore and boost economic growth."
Hong Vanak, director of International Economics at the Royal Academy of Cambodia, told The Post on October 24 that the national budget revenue for 2022 would increase on the back of a consistent rise in exports.
He said government revenues would reap a significant windfall when the country reopens soon, as coronavirus vaccination rates climb.
“I am confident that the revenue collection of customs duties and taxes in 2022 will increase,” Vanak said.
In its pursuit of 4.8 per cent GDP growth in 2022, the government will focus “not only on rapid economic recovery and people's livelihoods, but also on ensuring equitable, sustainable and inclusive economic development based on the three pillars of ‘Economic recovery’, ‘Reforms’ and ‘Building resilience”, the Cabinet went on to say.
“Economic recovery”, the first of the three priority strategies, entails building a strong foundation for moving the economy back into growth territory, with a focus on safety, impact management, the revival and stabilisation of viable businesses – especially in the most affected sectors – and the rapid creation of new jobs, Minister of Economy and Finance Aun Pornmoniroth explained in mid-August.
“Reforms” covers the continued introduction of key reform measures as instruments designed to improve, among other things, trade facilitation, investment and business, promotion apparatuses and digitalisation in economic systems used in the public and private sectors, he said.
“Building resilience” involves strengthening preparedness and response capacity to disease outbreaks or similar public emergencies that could emerge in the future, and focuses on the development of solid health and social protection systems, effective social intervention programming, and ensuring the sustainability and inclusivity of socio-economic rehabilitation and development, he added.
“In order to be successful in all of these strategies, Cambodia needs to increase its commitment and focus on firm efforts and high political will, putting the national interest first in the fight against Covid-19 and accelerate reforms in all areas, especially in public institutions and their capacity building, to ensure that Cambodia can achieve its long-term development vision,” Pornmoniroth said.