World Bank Group2014-10-162014-10-162014-10https://hdl.handle.net/10986/20438This issue of the Cambodia economic update covers the following selected issues: 1) making the most of the Cambodian rise sector; and 2) creating opportunities for firms as reflected in findings from the investment climate assessment. For FY2014 economic growth held up well despite domestic uncertainty and instability in neighboring countries. Real growth is estimated to reach 7.2 percent, driven by the garment, construction, and services sectors. Overall macroeconomic management has been good with fiscal consolidation underpinned by improved revenue administration. In 2015 with the expectation of renewed confidence and the return of political stability after ending a yearlong political deadlock in July 2014, bolstered by a strengthening global economy, Cambodia's real growth rate is expected to reach 7.5 percent, similar to that of 2013. The downside risks to the projected robust growth are a potential recurrence of labor unrest, natural disasters, especially the possibility of heavy floods, as well as regional political uncertainty. Concerning rice production, growth decelerated in 2013 highlighting the importance of revitalizing the rice sector so it becomes once again a key engine of GDP growth. While the milled-rice export market is steadily expanding and increasing the number of destination markets, the milling and transport costs of Cambodian rice make it loose the competitiveness it has at farm gate prices. The Royal Government of Cambodia (RGC) has set a very legitimate target of one million tons of milled rice exports that matters tremendously for poverty reduction and shared prosperity. Concerning the investment climate assessment findings, RGC's new five-year Rectangular Strategy III continues to prioritize improving the business environment to help diversify and increase value-added in production. The current period of robust growth represents an opportunity to make improvements to the business environment that will attract long-term investors. Proposed next steps in reforming the business environment include: a) addressing the high cost of electricity; b) automating government processes; c) encouraging new investment, particularly in special economic zones; d) continuing improvements to trade facilitation; e) completing the draft Competition Law; f) designing and implementing a system of incentives for business registration; and g) focusing on implementation and enforcement.en-USCC BY 3.0 IGOACCOUNTINGADVANCED ECONOMIESAGRICULTURAL COMMODITIESAGRICULTURAL COMMODITYAGRICULTURAL PRACTICESAGRICULTURAL PRODUCTIONAGRICULTUREAUDITSBANK FINANCINGBANKING SECTORBANKING SUPERVISIONBANKING SYSTEMBENEFICIARIESBORROWING COSTSBROAD MONEYBUSINESS CLIMATEBUSINESS ENVIRONMENTCAPITAL FORMATIONCAPITAL INFLOWSCAPITAL INVESTMENTCAPITAL STOCKCENTRAL BANKCODE OF CONDUCTCOLLATERALCOMMODITY EXPORTSCOMMODITY PRICESCONSUMER PRICE INDEXCONSUMERSCONSUMPTION GOODSCPICREDIT GROWTHCURRENT ACCOUNTCURRENT ACCOUNT BALANCECURRENT ACCOUNT DEFICITDEBTDEBT BURDENDEBT SERVICEDEBT SERVICE RATIODEBT SUSTAINABILITYDEPOSITDEPOSIT RATEDEPOSITSDEVELOPED COUNTRIESDEVELOPING COUNTRIESDEVELOPING COUNTRYDEVELOPMENT STRATEGYDOMESTIC BANKDOMESTIC CREDITE-COMMERCEECONOMIC ACTIVITYECONOMIC DEVELOPMENTECONOMIC DEVELOPMENTSECONOMIC EXPANSIONECONOMIC GROWTHECONOMIC IMPACTECONOMIC SECTORSENVIRONMENTALENVIRONMENTSEXCHANGE RATEEXCHANGE RATE TARGETINGEXCHANGE RATESEXPANSIONARY FISCAL POLICYEXPENDITUREEXPORT COMPETITIVENESSEXPORT GROWTHEXPORT MARKETEXPORTEREXPORTERSEXPORTSEXTERNAL DEBTEXTERNAL FINANCINGFARMSFEDERAL RESERVEFEDERAL RESERVE SYSTEMFINANCIAL CRISISFINANCIAL INSTITUTIONSFINANCIAL MANAGEMENTFINANCIAL SECTORFINANCIAL SECTOR DEVELOPMENTFINANCIAL STABILITYFISCAL BALANCEFISCAL CONSOLIDATIONFISCAL DEFICITFISCAL POLICYFISHERIESFIXED ASSETSFOOD PRICEFOREIGN CURRENCYFOREIGN DIRECT INVESTMENTFOREIGN EXCHANGEFOREIGN EXCHANGE RESERVESFOREIGN INVESTMENTFOREIGN INVESTORSFOREIGN MARKETSFOREIGN TRADEFORESTRYGDPGLOBAL ECONOMYGOVERNMENT EXPENDITUREGOVERNMENT EXPENDITURESGOVERNMENT REVENUESGOVERNMENT SAVINGSGOVERNMENT SPENDINGGROSS DOMESTIC PRODUCTGROWTH RATEGROWTH RATESHOLDINGSHUMAN DEVELOPMENTIMPORTSINCOMEINCOME TAXINFLATIONINFLATIONARY PRESSUREINSTRUMENTINTEREST RATEINTEREST RATE SPREADINTEREST RATESINTERNATIONAL BEST PRACTICEINTERNATIONAL FINANCIAL MARKETSINTERNATIONAL MARKETINTERNATIONAL RESERVESINTERNATIONAL TRADEINVESTMENT CLIMATEINVESTMENT PROJECTSINVESTOR CONFIDENCEJOINT VENTURESLABOR MARKETLAND POLICYLAND TITLELDCSLENDERLENDER OF LAST RESORTLEVEL PLAYING FIELDLOANLOCAL BUSINESSLOCAL CURRENCYLOCAL GOVERNMENTLOCAL GOVERNMENTSLONG-TERM INVESTORSLOW-INCOME COUNTRIESMACROECONOMIC ENVIRONMENTMACROECONOMIC MANAGEMENTMACROECONOMIC POLICYMACROECONOMIC STABILITYMACROECONOMIC UNCERTAINTYMACROECONOMICSMAJOR CURRENCIESMARKET STABILITYMICROENTERPRISESMIDDLE-INCOME COUNTRIESMONETARY AGGREGATESMONETARY AUTHORITIESMONETARY POLICYMONEY GROWTHNATIONAL BANKNATIONAL CURRENCYNATURAL DISASTERSNEW MARKETSOILOPEN MARKETOUTPUTOUTSTANDING CREDITPOLICY ENVIRONMENTPOLITICAL STABILITYPOLITICAL TURMOILPOLITICAL UNCERTAINTYPORTFOLIOPOST-CRISIS PERIODPOVERTY REDUCTIONPRICE RISKSPRICE STABILITYPRICE VOLATILITYPRIMARY MARKETPRODUCERSPRODUCTION FUNCTIONPRODUCTION INCREASESPRODUCTIVITYPUBLIC INVESTMENTPUBLIC INVESTMENTSPUBLIC SPENDINGREAL EFFECTIVE EXCHANGE RATEREAL ESTATEREAL GDPREAL GROWTH RATEREFORM PROGRAMREGULATORY ENVIRONMENTREGULATORY FRAMEWORKREMOTE AREASRESERVESRESOURCE ALLOCATIONRETURNRETURNSSECURITIESSHORT-TERM BORROWINGSHORT-TERM DEBTSHORT-TERM INTEREST RATESOCIAL DEVELOPMENTSPECULATIVE BUBBLESSUSTAINABILITY ANALYSISTAXTAX COLLECTIONTAX INCENTIVESTAX REVENUETECHNOLOGICAL CHANGETECHNOLOGY TRANSFERSTRADE BALANCETRADE DEFICITTRADE TAXESTRADINGTRADING PARTNERSTREASURYTREASURY SECURITIESURBANIZATIONVALUE ADDEDWAGESWHOLESALE PRICESWORKING CAPITALWORLD DEVELOPMENT INDICATORS10.1596/20438