Economic slowdown not so severe, says Cambodian government

The Cambodian government’s projection contradicts that of the IMF’s, which expects the Cambodian economy to contract by 2.8% in 2020.
By: | October 27, 2020
Topics: Compensation and Benefits | Job Cuts | News | Restructuring

Cambodia’s economy will contract around 1.9% this year and rebound to 3.5% growth in 2021, the Cambodian government has projected.

According to government spokesperson Phay Siphan, the services sector is expected to contract 3.0% before registering 3.6% growth in 2021, while the agriculture will grow 0.9% and 1.6% this year and next year respectively.

Siphan added, “Against the backdrop of increasing uncertainty domestically and abroad, it is paramount for the government to continue its battle against COVID-19, as well as maintain business activity and people’s livelihoods in order to ensure socio-economic stability and achieve 3.5% economic growth next year.”

To help businesses continue operations, the Cambodian government will provide additional fiscal incentives and credit guarantee schemes to boost liquidity in the market. These include the implementation of cash transfer, cash-for-work and short-term skills training programmes, said Siphan.

READ: Asian economies reel from COVID-19 outbreak

Earlier this month, the International Monetary Fund (IMF) projected a 2.8% contraction for the Cambodian economy this year, while predicting a strong 6.8% growth rebound in 2021. To achieve this target, the IMF advised the Cambodian government to prioritise spending on vulnerable sectors in order to boost economic activity and create more jobs.