Logo of Phnom Penh Post newspaper Phnom Penh Post - Consumer inflation rises 2.5% in H1

Consumer inflation rises 2.5% in H1

Content image - Phnom Penh Post
Consumer inflation rate climbed 2.5 per cent in the first half of this year. FRESH NEWS

Consumer inflation rises 2.5% in H1

Cambodia registered a remarkably sound consumer inflation rate of 2.5 per cent in the first half (H1) of this year by virtue of the slow rise in food prices, slipping petrol rates and stabilisation of local currency against the US dollar, the National Bank of Cambodia (NBC) said in its semi-annual report on Wednesday.

The central bank said the increase in prices for foodstuffs was driven down to four per cent from the beginning of the year by Covid-19 disruptions to goods transport.

With the unforeseen plunge in global oil prices in mid-January weighing heavily on the market, petrol-related goods and services saw a 3.5 per cent deflation over the first half, it said. Retail petrol price slid to 2,950 riel ($0.72) per litre from 3,650 in the second half of last year.

NBC governor Chea Chanto said the Covid-19 outbreak snowballed into a global health catastrophe and created an economic predicament eclipsing in severity the 2008-2009 Financial Crisis.

This, he said, has delivered a devastating blow to key pillars of the Kingdom’s economy – trade, investment and international visitors.

“Against this backdrop, Cambodia has laid out a handful of measures to control the spread of Covid-19. Be that as it may, we have a steadfast macroeconomy . . . we managed to maintain low inflation and a stable exchange rate,” Chanto said.

The banking sector saw strong growth and actively contributed to providing liquidity to the economy, he said, adding that deposits and loan balances continued to grow amid the mounting economic challenges.

“The main risks to the banking sector stemming from the continued Covid-19 pandemic include a decline in the incomes of people and businesses which could result in the stifled growth of loans and deposits, a slump in the construction and real estate industry and a slowdown in foreign capital inflows into the banking industry,” he said.

Business Research Institute for Cambodia CEO and chief economist Hiroshi Suzuki told The Post that the Kingdom’s first half consumer inflation rate was very stable and reflected the authorities’ efforts to stabilise the macroeconomy.

“We appreciate the great efforts expended by the National Bank of Cambodia and the Ministry of Economy and Finance to stabilise the macroeconomy of Cambodia even in this very tough situation under Covid-19.

“Although the international market price [of oil and other commodities] fluctuated, now we can see stabilised prices because of the decreasing demand in the world market under Covid-19.

“I would like to agree with the estimated inflation rates by the NBC and other international organisations which all show stable inflation rates,” Suzuki said.

The exchange rate of the local currency appreciated 1.6 per cent to 4,104 riel against the greenback, compared to 4,036 riel in the same period last year, said the NBC. It predicted that inflation will remain at 2.5 per cent.

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

  • Demining rat ‘hero’ Magawa dead at 8

    A landmine-hunting rat that was awarded a gold medal for heroism for clearing ordnance from the Cambodian countryside has died, his charity said on January 11. Magawa, a giant African pouched rat originally from Tanzania, helped clear mines from about 225,000sqm of land – the equivalent of 42

  • 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