Georgieva of the IMF predicts that Cambodia's economy will rise by 4.2 percent in 2021

Kristalina Georgieva, managing director of the International Monetary Fund (IMF), said on April 7 that the Cambodian economy is projected to expand 4.2 percent this year after contracting by 3.5 percent in 2020, but she cautioned that local governments around the world should continue to pursue prudential policies and constructive management.

Kristalina made the remark during the opening press conference of the virtual IMF and World Bank Spring Meetings in 2021.

The global outlook is brighter, she said, noting that the global economy is expected to grow by 6% this year, boosted by additional policy support and millions of people vaccinated with Covid-19.

“This is in addition to the outstanding and well-coordinated measures taken over the past year. Although there is some light, the crisis continues to cast a dark shadow,” she added, noting that a small number of “advanced and emerging market economies,” led by China and the United States, are accelerating while “weaker and poorer countries” fall behind in this multi-speed recovery.

“We also face a great deal of uncertainty, especially as new virus strains emerge and financial conditions change. And there is the possibility of more economic scarring from work losses, learning losses, bankruptcies, extreme poverty and hunger.

“Policymakers must act now by giving everyone a fair chance – not just in people's arms, but also in their lives and in vulnerable economies,” Kristalina said.

She outlined three main goals for individual governments to address: first, ensuring that everybody gets a “fair shot at the vaccine,” increasing the manufacture and delivery of Covid-19 vaccines, and avoiding export controls.

She explained that this includes financing the Covid-19 Vaccines Global Access (COVAX) Facility and ensuring that excess vaccines reach poorer countries.

Second, she acknowledged that a “fair shot at recovery,” or, for the most part, improving the resilience of distressed households and economically viable businesses, is a challenge that necessitates fiscal policies and favorable financial conditions.

The third is a "fair shot at the future," which she describes as "perhaps the most consequential decision any government will make this year."

“The focus should be on increasing public investment – in green initiatives and digital infrastructure, as well as people's health and education – to ensure that everybody benefits from the historic shift to greener, safer, and more inclusive economies.

“In order to realize this opportunity, countries would need adequate public revenues as well as more effective spending. In certain ways, this would entail more progressive taxes and an agreement on issues like minimum taxation for corporations and foreign tax protection.

“This must be accompanied by increased funding for poorer countries as they battle the crisis and continue to invest in the future,” Kristalina added.

On March 30, Permanent Secretary of State Vongsey Vissoth of the Ministry of Economy and Finance told the 7th Joint Meeting of ASEAN Finance Ministers and Central Bank Governors that the government had set aside nearly $2 billion to combat the spread of the novel coronavirus and resolve the economic effect on key sectors through eight rounds of mitigation measures.

He stated that the government will continue to introduce reform policies aimed at improving the country's competitiveness and creating a favorable climate for the private sector to do business and invest both domestically and internationally.

According to him, the government has set aside $1.164 billion for 2020 and $719 million for this year.

The government announced its eighth round of economic mitigation steps on March 25, with a focus on apparel, textiles, footwear, travel goods, bags, and tourism.

In April-June, the government will continue to provide $40 a month to staff in the sectors as part of its cash-handout initiative in response to the pandemic.

The total disbursement will be $70 if factory and business owners add $30 to the handout. Employers in the tourism industry, on the other hand, are urged to contribute as much money as possible voluntarily.

According to Vissoth, the government is planning to initiate a three-pronged economic recovery plan between 2021 and 2023.

The strategy's first phase, called "Revival and Survival," focuses on laying a strong base for economic recovery.

“Reform” is concerned with turning crises into opportunities, with an emphasis on economic diversification and competitiveness security.

And "Resilience" focuses on ensuring successful preparedness for future emergencies, which may arise from natural or human-caused causes.