Logo of Phnom Penh Post newspaper Phnom Penh Post - Economic outlook positive, ease of doing business still lagging: ADB

Economic outlook positive, ease of doing business still lagging: ADB

Workers prepare clothing for export at a garment factory in Phnom Penh in 2013.
Workers prepare clothing for export at a garment factory in Phnom Penh in 2013. Pha Lina

Economic outlook positive, ease of doing business still lagging: ADB

Cambodia’s economic outlook remains positive and the economy is forecast to grow at a robust 7 percent this year and next year, according to a report released by the Asian Development Bank (ADB) on Wednesday.

Growth in exports, strong foreign direct investment, growing tourist arrivals and increasing domestic demand should promote strong growth for the next two years, according to the bank’s Asian Development Outlook report.

Potential risks to the Kingdom’s growth remain, however, including the upcoming national elections in July, as well as the persistent difficulty of doing business in the country.

“Rising wages require that other costs of doing business be cut to maintain competitiveness with peer economies,” the report says. “Great potential exists in simplifying cumbersome business procedures.”

The report also calls for an improvement to the judicial system, which “is not seen as effective in resolving commercial disputes”.

Seang Thay, a spokesman at the Commerce Ministry, said yesterday the ADB’s outlook reflected the positive improvement of Cambodia’s economy. He also agreed with the need for further reforms to maintain competitiveness.

“We acknowledge that we need to try more to improve the procedure to provide easiness for business to do business in our country,” he said.

He encouraged patience, noting that the government would get better over time and keep improving.

Jan Hansen, the ADB’s senior country economist, reiterated the call for judicial reforms during the report’s presentation yesterday.

“What I think would be important is the establishing of commercial court,” he said. “The capacity building of judges and the commercial court would also help a lot to improve.”

Asked about a commercial court on Wednesday, Thay said that while it was an important step, further discussion with “relevant stakeholders” needed to take place. He also said that the National Commercial Arbitration Centre already existed for commercial disputes.

The spokesman declined to release any timeframe for possible implementation of a commercial court.

The ADB’s report also noted that garment and footwear exports were likely to slow in the future, but predicted that would be offset by strong growth in emerging industries, such as electrical parts and automobile components.

Higher demand for imports is set to increase the country’s trade deficit, however the bank expects increased tourism to bring in enough revenue to cushion the rise.

Meanwhile, higher foreign direct investments and official concessionary loans from abroad should be more than adequate to finance the current account deficit, even building up foreign reserves to about $10 billion by the end of the year.

MOST VIEWED

  • Massive stingrays may live in Mekong’s deep pools

    US scientists have suggested that unexplored deep pools in the Mekong River in an area of Stung Treng could potentially be home to significant populations of giant freshwater stingrays, one of the world’s largest freshwater fish species. This comes as a fisherman hooked a 180

  • CCC team off on US business trip

    The Kingdom’s leading economists and private sector representatives have called on the US to renew its tax preferential status for Cambodian exports, as a Cambodia Chamber of Commerce (CCC) delegation departed for a weeklong business visit to the US, where they will meet with

  • PM takes time to meet, greet Cambodians living in the US

    After landing in the US ahead of the ASEAN-US Special Summit, Prime Minister Hun Sen was received by over 1,000 Cambodian-Americans including political analysts who welcomed him with greetings, fist bumps and selfies. Hun Sen also met with analyst Mak Hoeun, who had allegedly spoken ill

  • Khmer cinema classics back on big screen for free at WB Arena’s outdoor movies series

    On a recent Saturday evening at WB Arena, Bunsong was enjoying a tasty BBQ meal with his family after work on the long tables that had been arranged out in front of the restaurant as they watched a Khmer action movie on a big outdoor

  • PM heads to Washington for ASEAN-US special summit

    Regional and international issues and how to bring the ASEAN-US partnership to another level will be discussed at length as Prime Minister Hun Sen and his ministers arrive in Washington, DC, for a special summit on May 12-13. During the trip, Hun Sen and ASEAN

  • National Assembly refutes EU resolution

    The National Assembly (NA) has hit back at a European Parliament resolution condemning the political and human rights situation in Cambodia, calling it another display of the Parliament’s “double standards”. Key points of the resolution include a warning that the Parliament could exclude the