The World Bank has forecast four percent growth for Cambodia this year after the economy shrank by an estimated two percent in 2021.
In its Global Economic Prospects report released in Washington Tuesday, it also forecast that Cambodia’s growth would accelerate to 5.2 percent next year.
The forecast for 2021 is in line with National Bank of Cambodia expectations. The central bank’s recent Macroeconomic and Banking Sector Update forecast economic growth of at least four percent this year.
Cambodia’s expected growth rate this year is also identical to the World Bank’s forecast of four percent growth for the global economy in 2021.
In a statement, the bank warned that the global recovery will “likely be subdued, unless policy makers move decisively to tame the pandemic and implement investment-enhancing reforms.”
World Bank President David Malpass said policymakers faced “formidable challenges” in public health, debt management, budget policies, central banking and structural reforms.
“To overcome the impacts of the pandemic and counter the investment headwind, there needs to be a major push to improve business environments, increase labour and product market flexibility, and strengthen transparency and governance,” Malpass said.
The statement said the estimated 4.3 percent contraction in the global economy last year was “slightly less severe” than projected earlier.
This was “mainly due to shallower contractions in advanced economies and a more robust recovery in China.
“In contrast, disruptions to activity in the majority of other emerging market and developing economies were more acute than expected.”
World Bank chief economist Carmen Reinhart stressed the need to address “financial fragilities in many of these countries, as the growth shock impacts vulnerable household and business balance sheets.”
Emerging market and developing economies are forecast to grow 5 percent this year after contracting an estimated 2.6 percent in 2020.
Excluding China — where growth is seen accelerating from 2 percent in 2020 to 7.9 percent this year — these economies are forecast to expand 3.4 percent in 2021 after contracting an estimated 5 percent last year.
Growth in emerging market and developing economies is forecast to be fastest in East Asia and the Pacific, where an expansion of 7.4 percent is seen this year, led by China, Vietnam and Malaysia.
That compares with 3.7 percent in Latin America and the Caribbean, 3.3 percent in Europe, Central Asia and South Asia, 2.7 percent in sub-Saharan Africa and 2.1 percent in the Middle East and North Africa.
Source: Agency Kampuchea Press