Logo of Phnom Penh Post newspaper Phnom Penh Post - Kingdom on track for good 2018, says AMRO

Kingdom on track for good 2018, says AMRO

Workers stitch clothes at a garment factory in Sihanoukville’s Special Economic Zone.
Workers stitch clothes at a garment factory in Sihanoukville’s Special Economic Zone. Sahiba Chawdhary

Kingdom on track for good 2018, says AMRO

Cambodia’s economic growth is expected to remain stable this year and the next, but structural reforms and a rebalancing of the budget is critical in the medium term to sustain economic growth, the Asean+3 Macroeconomic Research Office (AMRO) said yesterday in a report.

According to the report, which comes following AMRO’s annual consultation visit that ended in June of this year and collected data up until mid-September, Cambodia’s economy is expected to grow at 6.9 percent in 2017 and 6.8 percent in 2018, buoyed by the tourism and construction sectors despite a slowdown in the garment sector.

Meanwhile, the regional think tank projected that headline inflation may increase further to 3.3 percent in 2017 from 3 percent in 2016, driven largely by increasing global oil prices. Inflation is expected to stabilise at around 3.5 percent in 2018, the report added.

‘Vulnerable to shocks’
While AMRO said that Cambodia’s “overall fiscal position remains strong, with continued high tax revenue collection”, it added that a larger fiscal deficit is planned in 2017 due to higher government spending to support the economy.

However, the report noted that Cambodia’s economic risks stem mainly from the rising cost of labour, the strengthening of the US dollar and a potential loss of preferential treatment in trade and external financing.

“The domestic financial system is vulnerable to shocks from the global financial market with its heavy dependence on external funding,” the report said.

It added that while Cambodia’s wage increase should be in line with underlying productivity growth, the Kingdom could offset the delay

in productivity if it enhanced its trade facilitation, improved logistics and reduced persistently high costs of electricity.

Nevertheless, AMRO urged that the Cambodian government needs to spend more of its budget on properly improving public sector capacity by “rebalancing budget allocation towards more capital investment”, which is essential to enhance growth prospects.

“Authorities should also consider diversifying financing sources to sustain infrastructure spending and boost spending efficiency,” the report said.

MOST VIEWED

  • Joy as Koh Ker Temple registered by UNESCO

    Cambodia's Koh Ker Temple archaeological site has been officially added to UNESCO’s World Heritage List, during the 45th session of the World Heritage Committee held in Riyadh, Saudi Arabia, on September 17. The ancient temple, also known as Lingapura or Chok Gargyar, is located in

  • Famed US collector family return artefacts to Cambodia

    In the latest repatriation of ancient artefacts from the US, a total of 33 pieces of Khmer cultural heritage will soon return home, according to the Ministry of Culture and Fine Arts. In a September 12 press statement, it said the US Attorney’s Office for the

  • Cambodia set to celebrate Koh Ker UNESCO listing

    To celebrate the inscription of the Koh Ker archaeological site on UNESCO’s World Heritage List, the Ministry of Cults and Religion has appealed to pagodas and places of worship to celebrate the achievement by ringing bells, shaking rattles and banging gongs on September 20. Venerable

  • Kampot curfew imposed to curb ‘gang’ violence

    Kampot provincial police have announced measures to contain a recent spike in antisocial behaviour by “unruly’ youth. Officials say the province has been plagued by recent violence among so-called “gang members”, who often fight with weapons such as knives and machetes. Several social observers have

  • PM outlines plans to discuss trade, policy during US visit

    Prime Minister Hun Manet is set to meet with senior US officials and business leaders during his upcoming visit to the US for the UN General Assembly (UNGA), scheduled for September 20. While addressing nearly 20,000 workers in Kampong Speu province, Manet said he aims to affirm

  • Manet touches down in Beijing for high-level meetings

    Prime Minister Hun Manet arrived in Beijing on September 14 for his first official visit to China, where he is slated to attend the 20th China-ASEAN Expo and meet other leaders including Chinese President Xi Jinping. Upon his arrival, Manet laid a wreath at the Monument