Publication: Cambodia Economic Update, November 2020: Restrained Recovery
Loading...
Date
2020-11
ISSN
Published
2020-11
Author(s)
Editor(s)
Abstract
The Coronavirus disease (COVID-19) pandemic has abruptly interrupted Cambodia’s celebrated growth story. The pandemic has effectively stalled the construction and real estate boom that relied heavily on foreign investment. High-frequency phone surveys of households validated the adverse impact of the pandemic on employment. As the global economic crisis caused by COVID-19 continues, the economy in 2020 is projected to contract by 2.0 percent, the sharpest decline in Cambodia’s recent history. The most important policy goal must be to urgently regain jobs lost or suspended due to the pandemic. In this regard, full attention must be paid to boost investment in labor-intensive sectors to generate jobs. Looking ahead, it is essential to facilitate an expansion of domestic and foreign investment arising largely from recent bilateral and regional free trade agreements. It is imperative to continue to closely monitor vulnerabilities arising from a prolonged construction and property boom and the increase of credit provided to the construction and real estate sector. It is critically important to develop a COVID-19 vaccine distribution infrastructure, while identifying potential COVID-19 vaccine availability and affordability. Cooperation has been sought with regional countries developing COVID-19 vaccines such as China to ensure Cambodia has access to the COVID-19 vaccine when it is available.
Link to Data Set
Citation
“World Bank. 2020. Cambodia Economic Update, November 2020: Restrained Recovery. © World Bank. http://hdl.handle.net/10986/34932 License: CC BY 3.0 IGO.”
Associated URLs
Associated content
Other publications in this report series
Journal
Journal Volume
Journal Issue
Collections
Related items
Showing items related by metadata.
Publication Tunisia Economic Monitor, Fall 2020(World Bank, Washington, DC, 2020-09)Tunisia is expecting a sharper decline in growth than most of its regional peers, having entered the COVID-19 (coronavirus) crisis whilst already experiencing slow growth and rising debt levels. After an expected 9.2 percent contraction in 2020, growth is temporarily expected to accelerate to 5.8 percent in 2021 as the pandemic’s effects begin to abate, before returning to a more subdued growth trajectory at around 2 percent by 2022, reflecting pre-existing structural weaknesses. With this, some of the past gains in job creation and poverty reduction will be lost as unemployment edges up and the share of the population vulnerable to falling into poverty increases. In this difficult context, restoring the credibility of the macroeconomic framework is a critical next step for Tunisia to successfully navigate its way through this crisis and lay the foundation for a more durable recovery in growth. The special focus in this edition of the Tunisia Economic Monitor draws on the recently published enterprise survey for Tunisia to discuss the latest evidence on firm performance and present priorities for a growing and more productive private sector.Publication Kenya Economic Update, November 2020(World Bank, Nairobi, 2020-11-24)Kenya’s economy has been hit hard by COVID-19, severely affecting incomes and jobs. The economy has been exposed through the dampening effects on domestic activity of the containment measures and behavioral responses, and through trade and travel disruption (affecting key foreign currency earners such as tourism and cut flowers). Real Gross Domestic Product (GDP) contracted by 0.4 percent in H1 2020 year-on-year(y/y), compared to growth of 5.4 percent in H1 of 2019. This reflects a worse-than-anticipated Q2 GDP outturn, mainly due to a sharp reduction of services sector output, especially education. As a result, the economy is projected to contract by 1.0 percent in 2020 in the baseline scenario, and by 1.5 percent in a more adverse scenario. This revision essentially adopts the adverse scenario outlined in the April 2020 update, reflecting the more severe impact of the pandemic to date than had been initially anticipated, including on the measured output of the education sector following the closure of institutions in March. The special focus topic finds that the pandemic increased poverty by 4 percentage points (or an additional 2 million poor) through serious impacts on livelihoods, by sharp decreases in incomes and employment. The unemployment rate increased sharply,approximately doubling to 10.4 percent in the second quarter as measured by the KNBS Quarterly Labor Force Survey. Many wage workers who are still employed face reduced working hours, with average hours decreasing from 50 to 38 hours per week. Almost 1 in 3 household runbusinesses are not currently operating, and between February and June average revenue from household run businesses decreased by almost 50 percent. This has exacerbated food insecurity, and elevated pain and human suffering. In response to the crisis, the government has deployed both fiscal and monetary policies to support the healthcare system, protect the most vulnerable households, and support firms to help preserve jobs,incomes and the economy’s productive potential. Tax revenue dropped below target, due to the marked slowdown in economic activity, as well as tax relief as part of the government’s fiscal response package. At the same time, expenditures were raised to strengthen the capacity of the healthcare system to manage infections, protect the most vulnerable households, and support businesses.Publication Cambodia Economic Update, November 2019(World Bank, Phnom Penh, 2019-11)Cambodia’s economy continues to show signs of robust growth, underpinned by solid export performance and strong domestic demand. Key macroeconomic data for the first six-months, however, indicate a slight deceleration of economic activity this year, compared to a strong growth performance of 7.5 percent in 2018. Garment and footwear exports, accounting for about 70 percent of total merchandise exports, grew at 17.7 percent in 2018, but eased slightly to 15.3 percent (y/y) in June 2019. Bustling construction activity has continued, reflecting a sustained appetite for investment. As a result, steel imports skyrocketed, rising 63.5 percent (y/y) in volume terms in June 2019, up from 27.7 percent in 2018. During the first half of 2019, although the reported value of newly approved investment projects accelerated, foreign direct investment (FDI) inflows, of which about 40 percent originated from China, eased. The tourism sector remained resilient; international arrival growth increased to 11.2 percent (y/y) in June 2019, compared with 10.7 percent in 2018, with almost 40 percent of foreign visitors coming from China. Rising domestic consumption fueled by a surge in FDI inflows in recent years drove import growth. Imports of petroleum products and motor vehicles rose by 91.0 percent and 18.5 percent, respectively. Thanks mainly to depressed domestic food and oil prices, inflation continued to be subdued, declining slightly to 1.4 percent (y/y) in mid-2019, down from 1.6 percent in 2018. While being softly pegged at around 4,000 riel per US dollar, the local currency depreciated slightly to 4,089 riel per US dollar in August 2019, up from 4,018 riel per US dollar in December 2018, likely due to slower capital inflows.Publication Tajikistan Country Economic Update, Fall 2020(World Bank, Washington, DC, 2020-12-21)The COVID-19 pandemic had a significant adverse impact on the Tajik economy. Real GDP growth slowed to 4.2 percent year-on-year in the first nine months of 2020, compared to 7.2 percent a year earlier. Restrictions on labor mobility and economic activity at home and abroad resulted in lower migrant remittances, weaker consumer demand, and reduced investments. Although exports enjoyed a record global demand for gold, the domestic market collapsed, suggesting a more severe impact of COVID-19 on domestic jobs and incomes. A growing share of the population reported reducing their food consumption, and the inability of previously returned migrants to travel abroad led to a significant increase in the unemployment rate. The healthcare system faces unprecedented pressure to accommodate a sudden influx of patients. International financial institutions and partner countries rushed with financial and in-kind aid to help Tajikistan contain the pandemic’s impact. In an effort to ameliorate the economic fallout, the authorities deferred tax collections, boosted health and social spending, and eased monetary policy. They established an interagency task force to address health challenges emerging from the pandemic.Publication Egypt Economic Monitor, November 2020(World Bank, Washington, DC, 2020-11)The COVID-19 (coronavirus) pandemic is causing the most severe global health and economic crisis in at least seven decades. In Egypt, the disruptions caused by the pandemic started in March 2020, and has since interrupted a period of macroeconomic stability, characterized by relatively high growth, improved fiscal accounts, and a comfortable level of foreign reserves. Yet, the pandemic also hit as longstanding challenges continued to persist, notably the government’s elevated debt-to-GDP ratio (despite its significant reduction in recent years), sluggish revenue-mobilization and the below-potential performance of non-oil merchandise exports and non-oil FDI. The fiscal, monetary and energy sector reforms implemented in recent years, along with the emergency measures undertaken by authorities in response to the COVID-19 crisis are so far helping Egypt weather the shock. Indeed, average real growth has remained positive during FY2019/20 and foreign reserves continue to be rather ample. Nevertheless, the COVID-19 pandemic has inevitably caused job and income losses, posing additional strains on Egyptian households’ livelihoods, and is thus exacerbating the long-standing challenge of job-creation in Egypt, notably in the formal private sector. The in-focus chapter of this report is therefore dedicated to the topic of jobs and economic transformation. The analysis of this chapter shows that the economic transformation process has been slow-moving in Egypt, with employment shares increasing either in low value-added sectors, or in sectors that have experienced a decline in productivity (value-added per worker). Hence, the Egyptian economy has not been able to generate high-earning jobs, at scale. Going forward, for businesses to expand and create sufficient and high-quality employment opportunities, a three-pronged approach will be necessary: (i) Sustaining macroeconomic stability and overall policy predictability whilst incentivizing domestic savings to finance investments. (ii) Getting the enabling environment right to create attractive opportunities for domestic and foreign investments. (iii) Upgrading human capital and firm capabilities to fast-track the economic transformation process in Egypt and to strengthen the country’s resilience against such severe shocks.
Users also downloaded
Showing related downloaded files
Publication Energy Sector Decarbonization in Vietnam(Washington, DC, 2022-06)Vietnam has made remarkable economic progress over the past 30 years; however, growth was supported by increasing reliance on coal-based energy. The energy sector would continue the expansion of coal-based energy with the significant increase in the installed capacity of coal power plants under previous plans. Vietnam has committed to achieving net-zero emissions by 2050 and gradually phasing out the use of coal for power generation. Selecting lower carbon pathways for the future growth of the energy sector requires the study of interdependencies of the power system through a robust analytical approach. The choice of decarbonization scenario should be based on a careful review of implications and opportunities at the sector level as well as more broadly at the level of the economy. Energy sector decarbonization would require the development of ‘just transition’ oriented policies and regulations to support the people, communities, and businesses. World Bank Group stands ready to provide comprehensive support for designing and implementing a low-carbon future for the energy sector.Publication Managing Pesticides for Greener Growth in Lao PDR(World Bank, Vientiane, 2021-03-26)Sound pesticides management and Integrated Pest Management (IPM) in particular are widely acknowledged as important mechanisms to mitigate pre- and post-harvest losses and to achieve sustainable agricultural intensification. The recent proliferation of agricultural concessions, contract farming arrangements, subsidies and other mechanisms in the country to stimulate production also mean a facilitated access to inputs that must be regulated. Preserving Lao PDR’s rich biodiversity is not only a conservation goal in itself but also contributes to food security, poverty reduction and development. Sound pesticides management contributes to agricultural competitiveness and trade. Trade in agricultural products, and in particular market access, is affected by the presence of pests in a traded consignment or the presence of excessive pesticide residues in food products that attract the application of sanitary and phytosanitary (SPS) measures by trading partners. The Lao PDR Government has made strides in controlling banned, unregistered and illegally imported pesticides in the last ten years.Publication Urban Transport in Yangon(World Bank, Washington, DC, 2020)Yangon is the largest city and main economic powerhouse in Myanmar. The increased urbanization and economic activity in Yangon in the past decade may be potentially hampered by higher motorization and its negative impacts, particularly for the poor, including longer travel times to jobs and services, and increasing traffic-related injuries and fatalities and pollutant emissions. The report calls for urgent actions to seize the window of opportunity brought by a growing economy and put forward actionable, simple, and affordable strategies aiming to provide efficient, equitable, clean, and safe mobility for the population in two major cities in Myanmar. This overview note presents highlights of the report for Yangon. It aims to support policy discussions on how to improve the urban transport sector performance and match with adequate funding and financing options suited to the bold vision for Yangon.Publication Lao PDR Forest Note(World Bank, Washington, DC, 2020-06-05)Natural capital in Lao PDR is a major source of wealth for the country and becomes even more strategic in times of economic stress. While forest products directly benefit vulnerable rural communities, ecosystem services from forests support key economic sectors such as energy, agriculture, industry, and tourism. Forests and downstream industries also offer important job and livelihood opportunities in rural areas in Lao PDR that can be expanded. This country forest note provides an upstream analysis of the status of forests as well as investments and policies relevant to the forest sector in the Lao People’s Demographic Republic. The analysis looks at forests in a programmatic and cross-sectoral manner to strategically position the World Bank Group to support the country in delivering on forest-relevant interventions.Publication Philippines Country Climate and Development Report(World Bank, Washington, DC, 2022-11)Climate change poses major risks for development in the Philippines. Climate shocks, whether in the form of extreme weather events or slow-onset trends, will hamper economic activities, damage infrastructure, and induce deep social disruptions. Adaptation to the risks of climate change, including both extreme events and slow-onset problems, is thus critical for the Philippines. Policy inaction would impose substantial economic and human costs, especially for the poor. Adaptation cannot eliminate the costs of climate change, but it can substantially reduce them. Many adaptation responses also contribute to mitigation; conversely, many mitigation measures generate local co-benefits, such as reduced air pollution. Although the Philippines is a relatively low emitter of greenhouse gas (GHG), it can contribute to global mitigation efforts through an energy transition, including a shift away from coal. The investment costs of such adaptation measures and an energy transition are substantial but not out of reach. The Philippines Country Climate and Development Report (CCDR) comprehensively analyzes how climate change will affect the country's ability to meet its development goals and pursue green, resilient, and inclusive development. The CCDR helps identify opportunities for climate action by both the public and private sectors and prioritizes the most urgent development challenges impacted by climate change in the Philippines.