Cambodia's economy will grow steadily in the future

The COVID-19 pandemic has raged globally, causing tens of thousands of casualties, hitting the world's financial markets even more, and affecting the economies of various countries. In the face of global turmoil, Cambodia has continued its economic development with a steady pace.

The pandemic has spread, the global economy has stagnated and the dollar has appreciated

The pandemic has spread globally, and as of May 5th, 3.6 million cases have been confirmed worldwide. Since the outbreak of the pandemic, countries around the world have successively adopted the policy of closing the city and locking up the country to prevent the pandemic, leading to a major shutdown of the world economy. Even though a few countries are still operating normally, they are faced with the dilemma of lack material and unavailable to transport goods.

IMF President Kristalina Georgiev said in early April that 170 of the 180 IMF members are facing the dilemma of economic downturn, and the world will also face the worst economic situation since the 1929 economic depression. According to the IMF forecast, the global economic growth will be negative in 2020, and the growth rate will be reduced from the originally estimated 3.4% to -3%. The growth rate fell sharply from 1.6% to -7.1%, and the world's factory China's economy will also decline, from 5.8% to 1.2%.

Cambodia has also been affected by COVID-19. Foreign direct investment has fallen sharply. Tourism, clothing, construction and real estate have suffered huge losses, and tourism has suffered the most. The World Bank estimates that Cambodia ’s economic growth rate will drop to 2.5% in 2020.

After the global economic turmoil caused by the Sino-US trade war in 2019, the US dollar continues to appreciate against currencies of various countries, and it is firmly positioned as a strong currency. With the good news that China and the United States will reach a tariff agreement at the end of 2019, the US dollar has retreated, giving governments of all countries breathing opportunities. However, this year's sudden pandemic has caused the devaluation of the currencies of various countries again. Taking Southeast Asian countries as an example, from the end of 2019 to April 25, the Indonesian rupiah depreciated most against the US dollar by more than 12%, the baht depreciated by 9.25%, and the currencies of Singapore, Vietnam, and Malaysia also depreciated by more than 5%. The world economy became worse.

Cambodia's stable anti-pandemic measure, World Bank real-time loan assistance

In order to prevent the spread of the pandemic, the Royal Government of Cambodia has gradually introduced anti-pandemic measures according to the situation. The scope includes Cambodian medical insurance and other pandemic prevention measures to prevent the spread of the disease. The World Bank further approved the IDA 20 million USD credit provided by the International Development Association (IDA) for the Cambodia COVID-19 emergency project, so that Cambodia can purchase much-needed medical supplies and equipment to strengthen disease prevention, detection and treatment.

According to the information released by the Ministry of Health of Cambodia on May 6, a total of 122 cases were confirmed in Cambodia. There were no new cases for 24 days, and a total of 120 cases were cured. There are only 2 confirmed patients left in the country. Real-time policies have stabilized and eased the pandemic, and created a good performance with a cure rate of 98%. Together with real-time loans from international organizations, they have injected vitality into Cambodia ’s future economy.

Cambodia accumulates energy, economy will be recover in future strongly

Cambodia's economic performance shows long-term and stable high growth. In 2019, it will shown an excellent performance with an economic growth rate of 7.1%. Before the outbreak of COVID-19, the World Bank estimated that it would still have a growth rate of 6.8% in 2020. Although it was reduced to 2.5% because of the pandemic, its performance is still better than that of many countries in the world, including European and American countries, Thailand, and Malaysia. Both the World Bank and the Asian Development Bank have given Cambodia excellent estimates of economic growth rates of 5.9% and 5.7% in 2021. The World Bank also predicts that Cambodia's economic growth rate will rise to 6.3% in 2022. 

In addition, the US dollar is highly circulated in Cambodia, regardless of transactions or payroll is denominated in US dollars. Compared with other countries’ exchange rate risks, Cambodia has reduced the changeable risk, which will help economy to recover in the future.

The economic recession caused by the COVID-19 is an inevitable dilemma for all countries. The Cambodian government can protect national health in a difficult situation, coupled with its excellent financial environment and conditions, its accumulated energy will quickly stabilize after the pandemic, and usher in bright economic prospects.