PM forecasts economic contraction of 1.9 per cent this year in Cambodia

PHNOM PENH, Jun 15, 2020, VNA. Prime Minister Hun Sen recently predicted that the country’s economy may contract 1.9 percent this year due to the COVID-19 pandemic, The Khmer Times reported.

In a circular on budget planning for 2021-2023, he said Cambodia has recorded a strong fall in demand from its trading partners.

Its growth heavily relies on garment and footwear exports, tourism, construction and real estate, and agriculture. However, garment and footwear exports and tourism have been hit the hardest by the coronavirus outbreak.

The prime minister is still optimistic that Cambodia’s economy will bounce back to 3.5 percent in 2021 due to the gradual recovery of global economy and external demand.

He forecasted inflation at a manageable level of 2.8 percent this year and slightly up to 3.1 percent next year due to a projected rise in international oil prices.

The World Bank said in its latest report late May that the country’s economy is likely to shrink between 1 percent and 2.9 percent this year, which will be the slowest pace since 1994.

Meanwhile, credit rating agency Moody’s last month predicted that the Southeast Asian economy may expand by about 0.3 percent in 2020 and 6 percent next year.