Logo of Phnom Penh Post newspaper Phnom Penh Post - IMF lauds Kingdom’s early-Covid moves

IMF lauds Kingdom’s early-Covid moves

Content image - Phnom Penh Post
International Monetary Fund (IMF) resident representative for Cambodia Yasuhisa Ojima during a courtesy call on National Bank of Cambodia (NBC) governor Chea Chanto on October 11. SUPPLIED

IMF lauds Kingdom’s early-Covid moves

International Monetary Fund (IMF) resident representative for Cambodia Yasuhisa Ojima is optimistic that Cambodia’s economy will see a quick recovery that reflects the “proactive measures” taken by the government to blunt the socio-economic impacts of Covid-19.

Ojima made the remark on October 11 during a courtesy call on National Bank of Cambodia (NBC) governor Chea Chanto, days after the Washington-based multilateral lender pegged the Kingdom’s economic growth for this year at two per cent.

An IMF team led by senior economist Alasdair Scott conducted virtual discussions for the 2021 Article IV consultation with Cambodia during September 13-27.

The development lender underlined that the Covid-19 crisis triggered a sharp fall in external demand last year that dragged down the economy, and that the Kingdom’s third coronavirus outbreak in 2021 – dubbed the “February 20 community event” marking the date it was first detected – further added to the woes.

However, Ojima said, the IMF “is highly optimistic, for the authorities have responded with measures to contain the spread of the virus and support livelihoods”.

The NBC “introduced measures early in the crisis to improve liquidity in the banking system and issued guidance to banks to facilitate loan restructuring as it contributes to the economic growth and the easing the burden of business people and the poor”, he was quoted as saying in a press release issued by the central bank.

The NBC’s Chanto expressed his appreciation for the IMF in Cambodia, lauding the institution for its “significant role” in facilitating the provision of technical assistance as well as human resource development in the Kingdom.

According to the IMF, the Cambodian economy could be expected to grow by around two per cent this year and five per cent in 2022 with extensive government support and a recovery in external demand.

“The government rapidly redirected resources to healthcare while rationalising other current spending. It implemented a system of cash transfers to vulnerable households. Loans and guarantees, tax breaks, wage subsidies, and support for retraining were extended to affected businesses.

“A slow recovery is projected. Staff projects growth of 2.2 per cent in 2021, increasing gradually to pre-crisis rates of 6.5 per cent after a few years. Inflation is expected to remain contained. With non-food and energy inflation subdued, overall inflation is projected to continue around three per cent.

“Future growth depends heavily on the course of the pandemic. Faster containment of the virus in Cambodia and other countries will facilitate resumption of tourism; slower progress would damage growth further.

“These risks appear skewed to the downside at this stage. Risks from before the pandemic include the concentration of banking sector assets in real estate. Past droughts and floods have demonstrated the vulnerability to climate change.

“The IMF stands ready to support the authorities’ reform efforts through policy advice and capacity development activities,” it said.

In late August, the IMF announced that Cambodia would receive about $240 million out of the International Monetary Fund’s (IMF) largest-ever distribution of Special Drawing Rights (SDR), equivalent to some $650 billion.

The distribution will aid the Kingdom’s economic recovery and better equip it to contend with the devastating repercussions of Covid-19, and especially the spread of new variants of SARS-CoV-2 – the coronavirus that causes the disease.

MOST VIEWED

  • Prince Norodom Ranariddh passes away at 77

    Prince Norodom Ranariddh, the second son of the late King Father Norodom Sihanouk and former First Prime Minister of Cambodia, has passed away in France at the age of 77. “Samdech Krom Preah Norodom Ranariddh has passed away this morning in France just after 9am Paris-time,”

  • Cambodia purchases 4 million Molnupiravir tablets

    Cambodia has arranged for the purchase of four million US-made Molnupiravir pills – enough to treat 100,000 Covid-19 patients – even though the current rate of daily infections in Cambodia remains low. The medicine will be distributed to state hospitals, pharmacies and private clinics, according to the Samdech

  • Rise in planned flights lifts travel hopes

    Six airlines have applied to resume flights in December, while two others have put in for additional flights and routes, according to State Secretariat of Civil Aviation (SSCA) head Mao Havannall on November 29. These account for 43 new weekly domestic and international flights in December, up 16

  • Is Cambodia’s travel sector in for another cheerless holiday season?

    The travel and tourism sector was heaving back to life as borders started to reopen, promising a festive vibe for the holidays and New Year. But Omicron and other Covid-related issues are threatening to close the year on a bleak note ‘Seems [like] Covid-19 won’

  • Cambodia, Thailand to discuss border reopening

    Cambodian authorities from provinces along the Cambodia-Thailand border will meet with Thai counterparts to discuss reopening border checkpoints to facilitate travel, transfer of products and cross-border trade between the two countries. Banteay Meanchey provincial deputy governor Ly Sary said on November 22 that the provincial administration

  • Cambodia planning new border checkpoint at Thma Da

    Cambodia is looking into the possibility of opening a new Thma Da Border Checkpoint with Thailand to boost trade and tourism. The Ministry of Public Works and Transport said on December 4 that Minister of Public Works and Transport Sun Chanthol led a technical working group