World Bank Projects Cambodia’s 2021 Economic Growth at 2.2 Percent
World Bank projects Cambodia’s economic growth at 2.2 percent this year, impeded by slow growth in services including tourism, and in construction, and real estate.
The traditional growth drivers – the garment, travel goods, footwear, and bicycle manufacturing industries, as well as agriculture, are underpinning the economic recovery, according to Living with COVID-19, the World Bank’s latest Economic Update for Cambodia issued on Dec. 9.
Despite recovery in manufacturing exports and expansion of agricultural commodity exports, the trade deficit has widened significantly, caused by rising imports of a few items, especially gold, used for savings, read the report.
“As we all know, Cambodia is now living with COVID-19 and very large numbers of populations have been vaccinated and the government began reopening the country for business, while continuing to enforce protective health measures,” said Ms. Maryam Salim, World Bank Country Manager for Cambodia.
“At the World Bank, we are preparing a Performance and Learning Review that will allow us to further strengthen and align our partnership with Cambodia as the country strives to achieve a resilient recovery from the impact of the COVID-19 pandemic,” she added.
However, growth is projected to reach 4.5 percent in 2022, but any renewed spread of the virus could put the recovery at risk, World Bank said.
To jump start the economic recovery, the report recommends key reforms areas, including, clear rules and regulations on living with COVID-19 under the “new normal”, regulatory and fiscal measures that support revival in the tourism sector, and prompt introduction of regulations to implement the new investment law.
It also says as the economic recovery takes shape, Cambodia can then start rebuilding its fiscal space and continues to monitor asset quality and improve confidence in the banking system.
The Cambodia Economic Update is a biannual report that provides up-to-date information on short- and medium-term macroeconomic developments in Cambodia. AKP