Illustrative image (Photo: Internet) Hanoi (VNA) - Cambodia's economy remained robust, underpinned bysolid export performance and strong domestic demand, said the latest World BankCambodia Economic Update.
In the Cambodia Economic Update, a biannual report that provides up-to-date information on short- and medium-term macroeconomic developments in Cambodia, the World Bank forecast that real growth is expected todecelerate to 7.0 percent this year from 7.5 percent last year.
Garment and footwear exports, accounting for about 70 percent of totalmerchandise exports, grew at 17.7 percent in 2018, but eased slightly to 15.3percent in June 2019.
Bustling construction activity has continued, reflecting a sustained appetitefor investment. As a result, steel imports skyrocketed, rising 63.5 percent inJune 2019, up from 27.7 percent in 2018.
The report noted that risks in the financial sector continue to grow, withincreased exposure to the construction and real estate sector alongside risingindebtedness—where combined bank and microfinance credit now accounts for over100 percent of GDP.
A possible withdrawal of the Everything But Arms (EBA) initiative, as well as asharp slowdown in the Chinese economy (a potential outcome of continuedU.S.-China trade tensions), could substantially dampen Cambodia’s growthprospects, it added.
To enhance Cambodia’s external competitiveness, the authorities recentlyintroduced measures to facilitate trade by lowering logistics costs, cuttingred tape, and supporting businesses with a six-day reduction in the number ofpublicly observed holidays in 2020.
In addition, a relatively large fiscal stimulus to be financed by governmentsavings could be introduced in 2020 to mitigate the negative impacts of thepotential withdrawal of the EBA.
World Bank Country Manager for Cambodia Inguna Dobraja said to move to the nextstage of GVC participation, Cambodia will need a much more sophisticated policymix. This would include expanding and deepening trade agreements, loweringbarriers to imported inputs, continue improving the education and skills of thelabor force, and harnessing the digital economy to support the integration of firmsinto global value chains./.
In the Cambodia Economic Update, a biannual report that provides up-to-date information on short- and medium-term macroeconomic developments in Cambodia, the World Bank forecast that real growth is expected todecelerate to 7.0 percent this year from 7.5 percent last year.
Garment and footwear exports, accounting for about 70 percent of totalmerchandise exports, grew at 17.7 percent in 2018, but eased slightly to 15.3percent in June 2019.
Bustling construction activity has continued, reflecting a sustained appetitefor investment. As a result, steel imports skyrocketed, rising 63.5 percent inJune 2019, up from 27.7 percent in 2018.
The report noted that risks in the financial sector continue to grow, withincreased exposure to the construction and real estate sector alongside risingindebtedness—where combined bank and microfinance credit now accounts for over100 percent of GDP.
A possible withdrawal of the Everything But Arms (EBA) initiative, as well as asharp slowdown in the Chinese economy (a potential outcome of continuedU.S.-China trade tensions), could substantially dampen Cambodia’s growthprospects, it added.
To enhance Cambodia’s external competitiveness, the authorities recentlyintroduced measures to facilitate trade by lowering logistics costs, cuttingred tape, and supporting businesses with a six-day reduction in the number ofpublicly observed holidays in 2020.
In addition, a relatively large fiscal stimulus to be financed by governmentsavings could be introduced in 2020 to mitigate the negative impacts of thepotential withdrawal of the EBA.
World Bank Country Manager for Cambodia Inguna Dobraja said to move to the nextstage of GVC participation, Cambodia will need a much more sophisticated policymix. This would include expanding and deepening trade agreements, loweringbarriers to imported inputs, continue improving the education and skills of thelabor force, and harnessing the digital economy to support the integration of firmsinto global value chains./.
VNA
