HOW CAMBODIA IS REBUILDING ITS ECONOMY FOR THE POST-PANDEMIC FUTURE

The prolonged fight against the Covid-19 pandemic has inflicted a hefty economic toll on countries. Triggered by the collapse of global economic output amid pandemic control measures, global growth contraction for 2020 is expected to hit 3.5 percent, according to International Monetary Fund (IMF) estimates.

While new vaccines were successfully rolled out toward the end of last year, the resurgence of cases and emergence of new virus variants continue to foster economic uncertainty.

In Cambodia, likewise, the fallout from the pandemic has dampened growth, though it is taking steps to steer its economy out of the crisis.
“Cambodia’s economy has been directly impacted by the pandemic and is projected to contract by 2 percent in 2020. Key sectors have been heavily affected especially tourism, manufacturing exports and construction, which collectively account for more than 70 percent of the country’s GDP growth,” shared Prayag Chitrakar, Country Manager, DHL Express Cambodia, on the impact of Covid-19.

Tourist numbers have plunged with foreign arrivals dropping 74 percent to 1.2 million between January and September 2020, down from 4.8 million in the same period in 2019.

Global supply chain disruption caused by the pandemic has also adversely affected Cambodia’s export market, especially for top export items such as garments, textiles, footwear and electrical parts. Simultaneously, a fall in foreign direct investment (FDI) has slowed the boom that was fueling growth in its construction and real estate sectors.

But could a restrained recovery now be on the way? The latest research from the World Bank predicts that slow tourism recovery may weigh down growth for the first half of 2021. However, it may strengthen in the second half as vaccines become more widely available and consumer confidence improves.

Cambodia’s openness to trade is another factor that will likely spur recovery. According to the DHL Global Connectedness Index 2020, which measures the development of trade, capital, information, and people flows, the kingdom ranks as the 46th most globally connected country — a relatively high ranking for a lower-middle income country.

Read the full article at The Business Times: https://www.businesstimes.com.sg/asean-business/how-cambodia-is-rebuilding-its-economy-for-the-post-pandemic-future%C2%A0

Photo: Pulse News Korea
Tags: Cambodia, Cambodia economy, COVID-19 impact

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