Cambodia drastically downgraded its economic forecast for 2021 to 2.5 per cent from the 4.1 per cent projection announced at the beginning of the year, due to the deteriorating Covid-19 situation.
Prime Minister Hun Sen announced the revised prediction on August 1 at the launch of the vaccination campaign for the adolescent group aged 12-17, at the Peace Palace in Phnom Penh.
The downgrade reflects, inter alia, the pandemic’s impact on the key economic sectors of Cambodia’s trading partners and ongoing production chain disruptions, he said.
He emphasised that the revision does not in any way discredit the competence or reliability of the economists and major institutions that presented more optimistic forecasts, saying that Covid-19-induced disruptions have derailed economic plans in Cambodia and around the world, justifying the updated growth figure.
World Bank regional vice-president for East Asia and Pacific Victoria Kwakwa told The Post in mid-July that the Kingdom is working hard to keep SARS-CoV-2 variants at bay, much like other countries in the region.
“It’s had to do significant lockdowns, even though, Cambodia, by now, has the highest share of the population vaccinated in much of the region, or maybe the second-highest, after Singapore.
“Our estimates are that Cambodia could grow at about four per cent, assuming that they’re able to be successful in getting these new variants under control.
“Now, on the downside, it could be as low as just one per cent, particularly if they’re not able to get a good handle on the pandemic,” she said.
Hun Sen said agriculture would for the foreseeable future remain a key player in undergirding Cambodian exports and in maintaining the food security level needed to shore up economic growth.
“Agriculture will persist as a sector that Cambodia must rely on, and I’ve been conveying all along how to make sure that Cambodia does not run out of rice for cooking – agriculture is a sublime sector,” he said.
Agricultural exports have grown beyond expectations, he said. And while milled-rice exports have recorded marginal contractions, paddy shipments to Vietnam and the UAE soared 200 per cent year-on-year, the prime minister said citing a Ministry of Agriculture, Forestry and Fisheries report.
International demand for paddy is rising as our stocks dwindle and rice mills run low on capital, he said.
Meanwhile, cashew nut exports surged nearly 300 per cent to more than 800,000 tonnes, he said, adding that sales of cassava, mangoes, bananas and other crops have amounted to billions of US dollars.
And navigating through the ebbs and flows of the crisis, small- and medium-sized industrial enterprises have endured as vital engines of economic activity, at the core of the Kingdom’s pandemic response efforts, he stressed.
He noted that exports of garments and footwear managed to remain in growth territory in the first half of this year, despite Covid-19 outbreaks in factories, disruptions in production chains, and a range of bottlenecks in international shipping that are plaguing suppliers.
Still, more investors are looking to try their hand at putting their money into Cambodia, Hun Sen said, pointing out that the Council for the Development of Cambodia continues to approve hosts of new projects, even as the pandemic drags on.