The Cambodian transport sector continues to experience a steady recovery from the Covid-19 crisis as activity and service prices more or less return to pre-pandemic levels, while the government works to deliver new infrastructure to support the Kingdom’s economic development, industry insiders and economists say.
This comes amid forecasts of 5.5 per cent, 5.6 per cent and 5.8 per cent growth in nominal gross domestic product (GDP) for this year by the World Bank (WB), Ministry of Economy and Finance, and International Monetary Fund (IMF), respectively, after the National Bank of Cambodia reported the 2022 figure at 5.1 per cent in January.
Among the most notable infrastructural undertakings are three expressway projects, connecting the capital to the different corners of the Kingdom. The first of these was the Phnom Penh-Sihanoukville Expressway, which was opened in October and formally inaugurated a month later.
On June 7, ground broke on a second expressway, linking Phnom Penh with Bavet town on the Vietnamese border, while a framework agreement for a third high-speed route – from the capital to Siem Reap province and on to Poipet town on the Thai frontier – was inked with Chinese state-owned China Road and Bridge Corp (CRBC), which has been brought on all three projects.
Logistics and Supply Chain Business Association in Cambodia (Loscba) president Chea Chandara confirmed to The Post on June 8 that domestic rates for transport services have dropped to roughly pre-Covid levels, noting that tenfold price spikes to certain overseas destinations were not unheard of during pandemic times.
“Due to geopolitical unrest, the Russo-Ukrainian War, and global economic unpredictability, the transport sector has not yet recovered to its [pre-Covid] strength in Cambodia or the rest of the world”, despite the lifting of essentially all pandemic-linked restrictions, he said.
Still, Chandara concurred that the flurry of new roads, bridges, ports, international airports and other infrastructure works of the past two or three years will go a long way to lowering production-related costs, expanding Cambodia’s transport sector, and attracting more national and international investors.
Cambodia Logistics Association (CLA) president Sin Chanthy stressed that transport activity too has roughly returned to pre-Covid levels, and agreed that the ongoing infrastructure projects would spur growth in the Kingdom’s transport sector, mainly by slashing associated costs and saving time.
“With all these accomplishments, I’m optimistic that the Cambodian transport and logistics sector will accelerate as the global economy begins to recover from the current crisis. The upgraded road, port and airport systems will boost the amounts of Cambodian-made goods sold abroad,” he said.
Royal Academy of Cambodia economist Hong Vanak remarked that transport infrastructure is key to enticing investors, adding that an extensive and cost-effective system will bring down production-related expenses, improve overall competitiveness, and increase exports.
“Freight transport is less active as a result of the current, poor global economic conditions. As the world economy perks back up and as Cambodia’s transport system improves, its economic growth will pick up speed,” he said.
According to Customs (GDCE), Cambodia’s international trade amounted to $15.161 billion in the first four months of 2023, down 14.10 per cent year-on-year and down 12.47 per cent half-on-half (compared to July-October 2022).
Exports totalled $7.234 billion, down 4.89 per cent year-on-year and down 1.82 per cent half-on-half, and imports were $7.927 billion, down 21.07 per cent year-on-year and down 20.36 half-on-half.
The Kingdom’s trade deficit – the amount by which a country’s imports exceed its exports – for the four-month period came in at $692.796 million, narrowing by 71.57 per cent year-on-year as well as by 73.19 per cent half-on-half, according to provisional GDCE data compiled in “International Merchandise Trade Statistics” bulletins.