Logo of Phnom Penh Post newspaper Phnom Penh Post - Investments gain steam over Jan-May as pandemic wanes

Investments gain steam over Jan-May as pandemic wanes

Content image - Phnom Penh Post
A bird’s eye view of Phnom Penh in January. SPM

Investments gain steam over Jan-May as pandemic wanes

The investment landscape in Cambodia showed a marked recovery over the first five months of 2022, during which the Council for the Development of Cambodia (CDC) approved 63 private investment projects outside of the Kingdom’s special economic zones (SEZ), 18 ventures more than in the same period last year, according to the finance ministry.

The projects had a total investment commitment of $2.3 billion, up by 183.1 per cent year-on-year, and were expected to create about 52,000 new jobs, up by 70.3 per cent, the Ministry of Economy and Finance said in its May 2022 Socio-Economic Trends report.

The top five sectors accounting for the most investment commitment were – in order – services, industry, energy, tourism and agriculture.

According to the report, the Cambodian economy is expected to sustain its upward trend for the rest of 2022, undergirded by better global demand, despite fallout from the Russia-Ukraine conflict, which the ministry noted was minimal due to the Kingdom’s limited economic relations with the two Eastern European countries.

The high Covid-19 vaccination rates and moves towards a greater reopening has allowed economic activity to gradually return to normal, the report added.

Speaking to The Post, Cambodia Chamber of Commerce (CCC) vice-president Lim Heng commented that the series of strategies launched by the government during the Covid-19 crisis to revive the economy have continuously shown positive results.

Offering examples, Heng explained that industrial production is now up and running nationwide, in a recovery he claimed has outpaced that of many countries. He also remarked that the number of domestic and foreign investors in Cambodia is on a steady rise.

In addition to beneficial domestic investment conditions, Cambodia has entered into a number of bilateral and multilateral free trade agreements (FTA), he said, adding that many major traders leverage the favourable terms of the deals to export goods to the markets of partners.

The steady increase in Cambodia’s trade figures suggests that the Kingdom is emerging as a thriving production and import-export hub, he claimed, predicting that the pace of new investment projects would continue to increase.

On July 21, S&P Global Ratings said it forecasts Cambodia’s gross domestic product (GDP) to expand to 6.3 per cent this year, higher than projections made by the World Bank, International Monetary Fund and Asian Development Bank.

“The country’s vaccination programme was a notable success, which facilitated its reopening and reinvigoration of foreign investments,” it said.

Hong Vanak, director of International Economics at the Royal Academy of Cambodia, credited the growth in new investors to political stability; a cheap, abundant and skilled labour force; high vaccination rates; and large import-export markets.

Vanak noted that investment in Cambodia has considerably diversified beyond the traditionally dominant garment sector, which he said would “make the Cambodian economic poles stronger” and improve access to more import-export markets.

“The development of new projects also helps Cambodia reduce labour migration,” he said.

In 2021, the Council for the Development of Cambodia (CDC) approved a total of 108 non-SEZ private investment projects – down 46 ventures from 2020 – with capital commitment of $1.719 billion, down by 72.6 per cent from nearly $6.3 billion, according to the finance ministry.

MOST VIEWED

  • 12th Cambodia int’l film festival to see return of Hollywood star

    Phnom Penh is set to come alive with the magic of cinema as the highly anticipated 12th Cambodia International Film Festival (CIFF) takes centre stage. Boasting an impressive line-up of 188 films from 23 countries, including captivating shorts, feature films, documentaries and animation, the festival promises an

  • Bareknuckle champion wants Kun Khmer fighter

    Dave Leduc, who is the current openweight Lethwei boxing champion in Myanmar, has announced that he will travel to Cambodia this year to challenge SEA Games gold medallist Prum Samnang any time that is convenient, after their planned match later this month in Slovakia was

  • Struggling Battambang artist dreams of staging full-scale gallery exhibition

    Leav Kimchhoth, a 55-year-old artist from Battambang province, is a familiar face to locals and tourists alike on the streets of the riverside in Phnom Penh. The one-armed painter and illustrator often hawks his work near the night market on weekends and public holidays. He

  • Fresh Covid warnings as Thai hospital fills

    A senior health official reminds the public to remain vigilant, as neighbouring countries experience an increase in Covid-19 cases, with the latest surge appearing to be a result of the Omicron XBB.1.5 sub-variant. Or Vandine, secretary of state and spokeswoman for the Ministry of Health,

  • 1.4 billion dollar Phnom Penh-Bavet expressway due in four years

    The Government, through the Ministry of Public Works and Transport, has officially signed a public-private partnership agreement with a private company for the construction of a Phnom Penh-Bavet Expressway project that will connect the capital to Svay Rieng province. The budget for the project is

  • New Law on Taxation comes into effect

    Cambodia has enacted the eagerly-awaited new Law on Taxation, which aims to improve the national tax regime’s compliance with present and future international standards and economic conditions; encourage accountability, effectiveness and transparency in the collection process; and promote investment in the Kingdom. King Norodom