Logo of Phnom Penh Post newspaper Phnom Penh Post - Govt muscles down inflation in first fiscal year

Govt muscles down inflation in first fiscal year

Govt muscles down inflation in first fiscal year

T HE Royal Government's first fiscal year performance was this week formally recorded in the National Bank's monetary statistics - by any standards, a "remarkable" set of results, according to financial analysts.

Even the bank allowed that "the economic stablization, namely the reduction of the inflation rate... has been well achieved."

The government, despite the well-publicised sacking of a "maverick" finance minister, has muscled inflation down from 145.7 percent to just 2.3 percent during its first 12 months to September 1994.

The bank notes in its report that the new government wanted to "reconstruct the country in all fields with the aim to stabilize the political, social and economic situation."

The statistics prove in this test, the government seems to have passed with honours.

The inflation rate during the third quarter of this year stood at 3.3 percent, slightly above the first quarterly result (1.5 percent) and the second (2.3 percent).

The bank said that was due to a slight increase in food and clothing prices in September, compared with August.

The average of the CPI during the third quarter was 4,951, an increase of about 700 from the first quarter.

The increase in the average CPI was because the food sub-index increased by about 11 percent. However, the average prices for services and daily items "plunged" and clothing was almost stable, the bank said.

The government can also pride itself on seemingly achieving full control and stability in the foreign exchange rate during the first year.

The official value of the riel compared with the US dollar has barely fluctuated over the twelve months. The biggest movement in the official exchange rate, month by month, was in January 1994 (when 2,470 riel bought $1) to September (2,605).

The bank notes that: "Set against the SDR, the riel has effectively depreciated by 16.4 percent since the end of December 1993."

In the key area of foreign exchange assets, the banks says: "This aggregate has further strengthened since the beginning of the year.

"In September, net foreign assets increased by 15.2 billion riel or 5.8 percent due to an increase of 39.4 billion riel in foreign assets, which was offset by a 24.2 billion riel increase in foreign liabilities".

However, while the formal records of the government's first year were "well-achieved", according to the bank, the rice shortage ravaging the country since those statistics were published are bound to have an adverse economic impact.

MOST VIEWED

  • Proof giants walked among us humans?

    For years a debate has waged about whether certain bas relief carvings at the 12th-century To Prohm Temple, one of the most popular attractions at the Angkor Wat Temple Complex in Siem Reap province, depicted dinosaurs or some rather less exotic and more contemporary animal,

  • Japan bank buys major stake in ANZ Royal Bank

    Japan's largest bank acquired more than half of ANZ’s shares in Cambodia on Thursday, according to a statement from Kith Meng’s Royal Group. Japan's JTrust Bank, announced that they had acquired a 55% of stake in ANZ Royal Bank. According to a Royal Group

  • Long way to go before Cambodia gets a ‘smart city’

    Phnom Penh, Siem Reap and Battambang will struggle to attain smart city status without adopting far reaching master plans, according to officials tasked with implementing the program. The brainchild of the Association of Southeast Asian Nations (Asean), the smart city program seeks to link up

  • China-Cambodia tourism forum held

    The Cambodian tourism sector must be prepared to welcome a growing number of Chinese tourists, as they lead the globe in the number of outbound travellers and were responsible for the most visitors to the Kingdom last year, the country’s tourism minister said on