Cambodia's economy to recover in 2021; accelerate in 2022: ADB

"The (Cambodian) government has responded quickly to the recent spike in cases, and we expect the economy to return to growth in 2021. This will help increase household incomes, but not all sectors and regions will benefit equally, so it will be essential to closely monitor household welfare and the need for additional support,” said ADB country director for Cambodia Sunniya Durrani-Jamal.

According to the Asian Development Outlook (ADO) 2021, industrial production is expected to rise 7.1 per cent in 2021 and 7.0 per cent in 2022 on the back of a rebound in the garments, footwear, and travel goods sector, as well as growth in other light manufacturing such as electronics and bicycles.

Travel restrictions are expected to remain in place for most of 2021, which means tourism is not expected to boost services this year, the report said.

“The uneven pace of the recovery across sectors will continue to put pressure on some households and firms this year, which will slow down the overall recovery. Key risks to the outlook include widening community outbreaks of COVID-19, slower than expected growth for Cambodia’s major trading partners such as the US and EU, continued weakness in domestic demand, and stress on financial services and banking,” said Durrani-Jamal, adding that the government needs to maintain its accommodative fiscal policy stance this year and next to support growth.

Currently, ADB is implementing $2.1 billion of investment projects in Cambodia. In 2020, ADB committed $477 million in sovereign loans and grants, and catalysed an additional $281.3 million through cofinancing for Cambodia. ADB’s lending pipeline for 2021-2023 includes $1.35 billion of concessional lending and $32.4 million in grants to support the country’s economic development and recovery from the COVID-19 pandemic.

ADB said it is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty.

Fibre2Fashion News Desk (RKS)