Consultative meeting with the Ministry of Economy and Finance (MoEF)
- 01 March, 2021
- Posted by: EuroCham Cambodia
This morning, EuroCham joined a consultative meeting of the Ministry of Economy and Finance (MoEF) on Cambodia’s Macroeconomic & Fiscal Policy Framework 2021-2022. We sincerely thank the Ministry for this interactive session and for giving us the opportunity to elaborate on our members’ specific concerns and our strategic focus as an organisation.
In 2020, the global economy performed better than initially anticipated, due to a favourable rebound in the second half of the year. Where in June 2020 the global economic decline for 2020 was still estimated at -4.9% (-10.2% for EU), this figure could eventually be readjusted to a global decline of -3.5% (-7.2% EU). The opposite was true for the ASEAN 5, dropping from an estimated -2.0% to -3.7%, below the global average [figures IMF, WEO June 2020 and January 2021]. Estimates for 2021 continue to show stark regional differences, for example with the Chinese economy projected to grow with 8.1%, almost double compared to the global and the EU’s average projected growth of 4.2%.
Adjusted projections put Cambodia just below the global average, with a projected GDP growth of 4.0% in 2021, steadily increasing to 6.9% in 2024. Currently, an additional 200-300 million USD is reserved to support post-pandemic recovery in Cambodia. The inflation rate is expected to grow slightly to 3.0-3.1% and to remain stable until 2024.
We are glad to see that the Royal Government has taken on board the private sector’s recommendations for a stronger “new normal”, aiming to focus in a two-tiered approach on the growth-driving sectors (agriculture and agricultural products, SMEs, (eco)tourism and higher-valued garments) and secondly, on the emerging sectors (in particular the digital sector, assembly industries and medical devices and equipment).
We very much welcome the government’s commitment, as part of its strategy, to focus on supporting digitalization, elevating the ease of doing business, incentivizing the formal economy and reducing logistics- and transport costs and its recognition that, to build resiliency, a stronger public administration, - human resources development, - key infrastructure development and focus on environmental sustainability is required.