Prime Minister Hun Sen on Friday affirmed that Cambodia has maintained its strong economic resilience effectively as some figures of macroeconomic indicators reflect that the country’s economy is in a strong position with high growth even though the country has been affected by the ongoing external factors in the regional and the world.
The affirmation was made during the graduation ceremony held at the Royal University of Phnom Penh (RUPP), attended by more than 7,000 students, senior government officials and representatives of Cambodia’s development partners.
The Premier pointed out that the market exchange rate on Thursday last week was 4048 riel per dollar on average, while the exchange rate set in the macro-economic framework or the national budget is 4050 riel per dollar. “Our exchange rate is good as it runs around this point,” he said, adding that Cambodia’s inflation is still manageable.
“We want the inflation to be lower than that, but it is impossible due to external factors, especially the oil price because all other items are affected by rising oil price as now we don’t transport by cow, buffalo or horse carts to markets, but by means of transportations that consume oil. Consequently, rising costs of transportation raise the prices of other goods,” the Premier said.
Mr Hun Sen said Cambodia’s economy is connected with the regional and global economies. However, the economy has been positively affected by its neighbouring Vietnam and Thailand. Vietnam’s economy is stable without high inflation, which does not negatively affect the economy, but Laos’s inflation has risen to about 40 percent, while Lao Kip has depreciated.
Prime Minister also indicated that the world has been impacted by geopolitical strategic competition and war between Russia and Ukraine that has been going on for little more than one year and has resulted in food and especially energy crises.
The Premier said the energy crisis has pushed inflation up globally, especially oil prices, saying that the oil price on the international market was $82.89 per barrel on Friday last week, which is slightly lower than several days ago when it was over $85 per barrel, but the price is good for both producers and consumers if it between $50-$70 per barrel.
“So, it has fluctuated … All things are connected with us and so we have to track them, while food security has been another challenge. In any situation, we must not let our country fall into a hard time in terms of food,” said Prime Minister Hun Sen, adding that Cambodia has been strengthening its food security management as a preventive measure.
Vongsey Vissoth, Secretary of State of the Ministry of Economy and Finance (MEF), said that the government has set macroeconomic and financial strategies on the strong economic resilience base in response to these hard times. He termed the year 2023 as a ‘special year for Cambodia’ and a test for the government’s leadership to overcome the subsequent crises that have been transformed from risks into reality.
Cambodia’s Gross Domestic Product (GDP) is re-projected at 5.6 percent from 6.6 percent for 2023, according to Vissoth. “It is the figure similar to the projections by the main international institutions,” he said, further adding that the global economy is expected to grow by 2.7 percent, while WB estimated at 1.7 percent and the ASEAN as the “bright spot”.
Vissoth said the world’s GDP has been re-forecasted by World Bank (WB) to 1.7 for 2023, which is more sceptical than the International Monetary Fund (IMF) that forecasted the GDP Growth for this year would be percent 2.7 percent after it estimated that the global economy would grow by 3.2 percent. “The figures have been lower and lower,” he said.
He also said the economic growths of the world’s main economic engines—United States, China and East Asia—have all declined, while one-third of all countries all over the world would fall into economic recession, but the economy of the Association of Southeast Asia (ASEAN) looks good.
“The ambition is high and difficult due to the complicated issues to come. Yet we have a maxim saying difficulty does not make us afraid, but it is the base or reason why we need to work harder. This is our strength. So, we must not be afraid of difficulty, but we need to work together… That’s why the macroeconomic and budget management will respond to all concerns and challenges that our country has been facing,” Vissoth added.