INTERNATIONAL: The National Bank of Cambodia has released its Macroeconomic and Banking Sector Development in 2021 and its Outlook for 2022. In its report, the NBC has forecasted a five percent growth of the Cambodian economy for this year, pushed back by global economic recovery.
The outlook for 2022 from the National Bank of Cambodia predicts that “Cambodia’s economy is optimistically expected to further recover at a faster pace of approximately 5 percent in 2022. Headline inflation is projected to be 2.6 percent primarily driven by subdued food prices as a result of improved supply condition, and the official exchange rate is expected to remain stable at around 4,075 riel per U.S. dollar,”
The NBC said the continued global economic recovery will support Cambodia’s exports in both garment and non-garment items, especially the electrical parts and bicycles, promoting diversifications in export.
In line with the rise in domestic incomes and foreign investment inflows into Cambodia, the construction and real estate sectors are also expected to gradually recover together with the agriculture sector, which absorbs about one third of total employment rate. Such sector is expected to perform better than 2021.
Agriculture and Agro-industry sectors will specially be benefited by the implementation of the Cambodia-China Free Trade Agreement (CCFTA) and Cambodia-Korea Free Trade Agreement.
The Regional Comprehensive Economic Partnership (RCEP), which is an agreement between ten ASEAN member states and other trading partners in the region, will also come into effect in early 2022, providing further opportunities for signatory countries to accelerate trades in goods and services, investment, and e-commerce activities.
The National Bank of Cambodia has also given the country’s re-opening since the first of November as another important factor for economy recovery.
Warming domestic economic activities such as trade, transportation, communication, and domestic tourism, the Kingdom’s reopening will also attract more international tourist arrivals, increasing profits in hotels and tourisms.
However, the tourist sector will grow in a slower pace than expected according to how the pandemic will unfold this year.
The returns of Cambodian migrant workers who acquired experiences from abroad will contribute to the improvement of domestic productivity, especially in agriculture and handicraft. Better economic performance will contribute to an increase in government’s revenues, fiscal buffers, and especially public investment, which will benefit long-term growth efforts.
The NBC has also stressed the importance of supportive policies in the banking system for maintenance of price and financial stability.
Digitalization will also be focused by the National Bank of Cambodia as a strategic plan to modernize financial services and promote financial inclusion, which will be in line with the Digital Economy and Society Policy Framework of the Royal Government 2021-2035.
