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Economy speeding up: AMRO

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A building is being constructed in Phnom Penh.

Economy speeding up: AMRO

The economy seems to be expanding at a faster pace this year, with the Kingdom’s projected growth rate sitting slightly above last year’s seven per cent, a new assessment by the Asean+3 Macroeconomic Research Office (AMRO) said.

This year’s strong momentum has been supported by robust construction activity, a steady garment sector and solid growth in tourism services.

AMRO’s assessment comes after an annual consultation visit by its specialists to Cambodia over a week this month.

It’s lead specialist Seung Hyun Hong said inflation remains relatively low and stable despite the expectations of faster economic growth.

“To maintain this strong momentum, the authorities need to strengthen their policy efforts to accelerate structural reforms, safeguard financial stability and reprioritise fiscal resources towards spending that enhances growth,” he said.

In its assessment, AMRO said the higher government spending was because of rising public investment while public sector wages will provide additional support for growth this year.

Inflation is projected to increase slightly to 3.1 per cent this year amid rising energy prices.

However, despite strong revenue growth, the budget deficit is expected to widen further. Given the rapid increase in public sector wages in recent years, pressure on rebalancing government expenditures will continue.

The report notes that the infrastructure gap remains large and spending on health and education is still relatively low.

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