Cambodia Weekly Financial News
April 08 ~ 12, 2024
08 April 2024
SCB Economic Intelligence Center pegs 6 percent FDI growth for Cambodia
The SCB EIC is the Economic Intelligence Center (EIC) unit of the Siam Commercial Bank Public Company Limited (SCB), headquartered in Bangkok, Thailand. The last SCB EIC report expects ASEAN CLMV (Cambodia, Laos, Myanmar, and Vietnam) nations, to witness accelerated economic growth in 2024 due to increasing foreign direct investment. According to the study, the rise in investment for the CLMV region, including Cambodia, is backed by a recovery in global exports and tourism in 2024 compared to 2023, which can be expected to bolster domestic demand through a labor market recovery within CLMV nations generally. These four CLMV nations are identified as having lesser overall economic development than the other member states of ASEAN, such as Malaysia, Singapore, the Philippines and others. Nonetheless, CLMV countries, as members of ASEAN, have unique advantages regarding labor and natural resources compared to some other players and show significant potential for the future as growth leaders of the ASEAN bloc. As per the EIC report, CLMV economies are primarily strong due to being well-positioned to benefit from the “China+1” strategy in 2024, which is seeing more and more multinational enterprises seeking to diversify their manufacturing bases to mitigate rising geopolitical trade risks
Source: Khmer times
08 April 2024
The Council for the Development of Cambodia (CDC)
approves projects worth $2.2 billion in the first quarter
The Council for the Development of Cambodia (CDC) approved 106 fixed assets investment and expansion projects worth $2.2 billion in the first three months of this year, a jump of 649 percent over the same period last year. Of the approved projects, 73 are in special economic zones and 33 others are in non-special economic zones, generating 107,000 jobs for local people. Breaking down by sectors, investment in the industrial sector has the largest share of 90.57 percent, while agricultures and agro-industry infrastructure and tourism accounted for 3.77 percent, 3.77 percent, and 1.89 percent, respectively. Kampong Speu and Svay Rieng provinces received a large number of projects. While 26 projects are in Kampong Speu province, 23 are in Svay Rieng, with 14 projects in Phnom Penh. Preah Sihanouk province received 13 investment projects, Kandal and Takeo provinces received nine projects each, and Kampong Chhnang province five. Koh Kong and Stung Treng provinces received two projects each, while Preah Vihear, Kampot and Kampong Cham provinces received one project each. "The rapid increase was due to new investment projects in infrastructure, industry, tourism, and investment expansion in special economic zones," CDC said in the report.
Source: Khmer times
08 April 2024
The Minister of Commerce points out three points to improve the
business and investment environment in Cambodia to be even better
Ms. Cham Nimmol, the Ministry has outlined three key areas of focus for enhancing the business and investment environment in Cambodia. The Minister highlighted the Ministry of Commerce’s focus on improving the business environment and investment in Cambodia, such as continuing to strengthen the enforcement of competition laws, consumer protection laws, and relevant legal documents in force, preventing all transactions and business activities that hinder, restrict, or undermine fair and equitable competition. This includes strengthening the protection of legal intellectual property and private property to promote the development of new products and services, innovations to ensure market competition, and the continued preparation and amendment of laws and regulations aimed at facilitating business and investment and strengthening Cambodia’s competitiveness in the international arena.
Source: Khmer Times
09 April 2024
Cambodia ranks first in ASEAN and third among the 20 fastest-growing economies in
Asia with a growth rate of 6.1% in 2024
According to Pen Bona, spokesperson of the Royal Government of Cambodia, the ranking of economic growth published by the Indonesian statistics firm SeasiaStats is based on the forecasts of international financial institutions. The spokesman recalled that under the leadership of Mr Hun Sen, the former Prime Minister, Cambodia had a high and steady economic growth of around 7% for decades. This enabled Cambodia to realize rapid development after achieving full peace with a win-win policy in 1998, Despite the global upheaval caused by the COVID-19 pandemic, Cambodia, under the astute leadership of the Royal Government, led by Mr Hun Sen, has demonstrated remarkable resilience. The government’s prudent management has mitigated the impact of this unprecedented health crisis, gradually steering the country and its people towards recovery.
Source: Khmer Times
10 April 2024
Cambodia’s growth forecast at 6.2 pct in 2024: AMRO
Cambodia’s economic growth is forecast to strengthen in 2024 with continued moderating inflation, said an ASEAN+3 Macroeconomic Research Office (AMRO)’s regional economic outlook released on Monday. The report said Cambodia’s economy is expected to grow at 6.2 percent this year, up from 5.3 percent last year. It added that inflation is projected to accelerate to 3.1 percent from 2.1 percent. The report said growth this year will be mainly driven by robust domestic demand, underpinned by increasing household incomes and recovering investment activity and tourism. According to the report, the kingdom’s economy is predicted to expand to 6.4 percent in 2025, with inflation decelerating to 2.8 percent.
Source: Khmer Times
10 April 2024
CDB endorses 173 investment projects worth approximately $4 billion in six months
The Council for the Development of Cambodia (CDC) has approved 173 investment projects worth some $4 billion during the last six months, from September 2023 to February 2024. The figures were shared at a Dissemination Workshop on Investment Law and a Sub-Decree on the Implementation of Investment Law held under the presidency of SUN Chanthol, Deputy Prime Minister and First Vice President of the CDC. The figures show an increase of 83 projects compared to the period of September 2022 to February 2023, while the investment capital rose by $3.1 billion. The approved investment projects are expected to generate a total of 180,225 jobs for the locals. According to Chanthol, the CDC has been collaborating with the capital and municipal administrations, the Cambodian Oknha Association, the Cambodia Chamber of Commerce, and other stakeholders to prepare a book on the investment potential of the 25 capital and provinces.
Source: Khmer Times
10 April 2024
Cambodia’s graduation from Least Developed Country (LDC) set for 2029
Cambodia is expected to see the graduation from the Least Developed Country ( LDC) status in 2029. The country’s second round of LDC graduation applications is scheduled to be submitted in June this year to the United Nations Economic and Social Council ( ECOSOC) for review and evaluation, said Minister of Planning Bin Trachhey. The first round of the country’s LDC graduation application was submitted in 2021 the year Cambodia met the graduation criteria for the first time. “ We will submit the LDC graduation application in June to ECOSOC. If the application meets the criteria, Cambodia’s LDC graduation in 2029 will be announced by the UN General Assembly” Trachhey said at the ministry’s annual meeting presided over by Prime Minister Hun Manet. Cambodia’s government has previously set a goal to leave LDC status by 2027 after the country’s two decades of sustainable economic growth. The government has also set a goal of transforming the country into an upper-middle-income country by 2030 and a high-income country by 2050.
Source: Khmer times
11 April 2024
67 percent of Cambodians have access to financial services, says NBC Governor
As high as 67 percents of Cambodians today have access to formal financial services, said Dr Chea Serey, Governor of National Bank of Cambodia. Dr Chae Serey referred to the results of a Mobile Tracker Survey conducted by UNCDF, where it was seen that the percentage of formal financial service users in Cambodia has increased significantly from 59 percent in 2015 to 67 percent in 2021.” And this brings us closer to the target of 70 percent by 2024; so that a majority of Cambodians are part of our financial system” said the Governor. The Governor also noted how NBC has cooperate with many ministries and development partners in promoting financial literacy, including digital financial literacy .” The NBC has paid attention to consumer protection by implementing laws and regulations to strengthen the effectiveness in protecting consumers rights and creating working groups to receive and handle complaints” she said. Cambodia’s total banking assets in 2023 were worth $84.3 billion or 265 percent of the country’s GDP. To add up Rath Sophoan, Chairman of ABC said “ Credit to customers was up $57.6 billion or180 percent of GDP. Today our banking system has a total of 3.8 million accounts with deposits as high as $47.9 billion. This is because Cambodia’s banking sector has undergone substantial transformation and development over the past three decades, leading to an era of solid and sustainable growth” .
Source: Khmer times
11 April 2024
The Association of Banks in Cambodia (ABC) vows to increase riel usage
According to Rath Sophoan, Chairman of ABC, to date, riel loans in the banking sector accounts for 11 percent of the total outstanding loan volume while riel in deposits sees a remarkable increase compared to last 10 years. “The Bakong system of the National Bank of Cambodia (NBC) and various other digital payment systems have contributed to making it easier for people to use the riel,” Sophoan said at a press conference yesterday. By the end of 2023, loans disbursed by financial institutions reached $57.6 billion or 180 percent of GDP in Cambodia, through a total of 3.8 million accounts, while deposits were $47.9 billion, through 18.6 million accounts, an ABC report showed. With the objective of de-dollarizing the economy based on the market mechanism and on a gradual approach, NBC has implemented various policy measures to promote the riel.
Source: Khmer Times
11 April 2024
Cambodia’s exports surge 18% in first quarter
Showing signs of a clear recovery, Cambodia’s exports reached $6.26billion in the first quarter (Q1) of the year, a surge of 18 percent compared to the same period last year, according to the trade data released by the General Department of Customs and Excise(GDCE). On the other hand, Cambodia’s imports also increased, reaching $6.23 billion during the January to March period this year, an increase of 6.4 percent, compared to the same period last year. The kingdom’s international trade exports and imports together ) reached $ 12.49 billion in Q1,2024, recording a growth of 11.9 percent, year on year. The Kingdom’s total exports in 2023 stood at $22.64 billion while the imports were estimated at $24.18 billion. The country also recorded a trade deficit of $1.53 billion last year
Source: Khmer times
12 April 2024
Women clients of MFIs save 9% more than men, says study
Women clients of microfinance institutions( MFIs) tend to have 9 percent more savings than men on average, as per a recent study. In a study on how microfinance affects the living standards of Cambodian borrowers by the Cambodian Microfinance Association(CMA) and ratings and research firm M-CRIL, it was found that women tend to have savings of about $73, compared to men having %67. But there is also a difference in the saving pattern. While women tend to have more current savings, they tend to keep the amount at home. Men on the other hand prefer parking their money with banks or MFIs. Women tend to keep higher savings (27 percent more) at home than men. But when it came to a bank, women tended to have less savings (41 percent less) in a savings account, compared to men. But when it came to keeping savings with a microfinance deposit-taking institution (MDI), the trust levels for men and women were similar and they tended to keep similar levels of savings with the institution. The study also showed the levels of knowledge and awareness of interest rate charges by financial institutions among clients. About half of MFI clients of both genders know the interest rates on at least one loan. But, when it came to overall financial knowledge, the study found that women were less likely than men to know the interest rate for all active loans. This includes the loans taken by other household members.
Source: Khmer Times
12 April 2024
Asian Development Bank(ADB) projects Cambodia to grow at 5.8% in 2024
The report forecasts continuing economic expansion in 2024-2025, supported by stronger export-oriented manufacturing. It also expects inflation, which averaged 2.1 percent in 2023 mainly on falling global energy prices, to remain at around two percent over the next two years. The report noted that graduation will improve the country’s international standing and investment attractiveness, but simultaneously pose challenges from reduced access to concessional financing and preferential trade treatments that propel sectors contributing to high growth and employment. The report stated that The exchange rate remained stable, averaging KHR 4,110 per US dollar. Money supply growth accelerated to 12.5 percent from 8.2 percent in 2022, but credit growth to the private sector slowed to 3.9 percent from 18.6 percent amid tighter global financial conditions. With external public debt forecast at 36.3 percent of the GDP in 2024 and 37.3 percent in 2025, the risk of public debt distress remains low. The government also plans to issue the equivalent of $108 million in sovereign bonds in 2024 to finance revenue-generating investment projects, the ADB report said. Foreign Direct Investment rose by 10.6 percent to $4 billion in 2023 and contributed to an increase in international reserves to $20 billion, the equivalent of 8.2 months of imports.
Source: Khmer Times
12 April 2024
Cambodia, Greater Bay Area( GBA) Entrepreneurs Alliance sign economic MoU
The Ministry of Industry, Science, Technology & Innovation (MISTI) and the Guangdong-Hong Kong-Macao Bay Area Entrepreneurs Alliance have entered into a Memorandum of Understanding (MoU), aimed at strengthening collaboration in trade, investment, and business exchanges between the Greater Bay Area (GBA) and Cambodia. Their objective was to gain insights into the government’s priorities and explore investment opportunities in Cambodia. Engaged in fruitful discussions with MISTI, the delegation expressed their keen interest in diverse investment avenues, particularly focusing on the establishment of green special economic zones, including the advancement of electric vehicles and charging infrastructure, implementation of energy storage solutions, adoption of waste-to-energy initiatives, deployment of 5G technology for converged communications, and aerospace and satellite imaging technologies.
Source: Khmer Times
Lady Aegies Comment: To be continue...............
