WEEKLY ECONOMIC UPDATED
Updated: 09 Nov-15 Nov,2019

TRADE & COMMERCE | China Free Trade Agreement Negotiations To Start In December

Negotiations for a free trade agreement between Cambodia and China, the second-biggest economy in the world, will begin next month, the Chinese Embassy in Phnom Penh announced yesterday. Following directions from the countries’ heads of state, China and Cambodia will launch the first official consultation on a bilateral FTA in Beijing on Dec 3, the embassy said. “This comes as a special arrangement in light of the friendly relations between China and Cambodia,” it said. “The ministries of commerce of the two countries have previously established a contact mechanism at the working level and maintained close communication.” Sok Sopheak, secretary of state at the Ministry of Commerce, confirmed the beginning of negotiations to Khmer Times yesterday. (Nov 15, 2019 | Khmer Times)

TRADE & COMMERCE | ‘Leaked’ EU Report Suggests Cambodian Efforts To Retain EBA Are Insufficient

The European Union’s report on the potential withdrawal of its Everything-but-arms (EBA) agreement was sent to the government yesterday, where officials familiar with the matter claim it has only been seen by the Ministry of Foreign Affairs and International Cooperation. However, Radio Free Asia (RFA) reported that it had received a leaked copy of the 70-page confidential document. The report is set to conclude the EU’s nine-month review of Cambodia’s access to the EBA trade agreement, which currently guarantees tariff-free trade on 99 percent of Cambodian goods being exported to the EU. However, because of human rights and labour rights abuses, the EU has been considering suspending the agreement that in 2018 enabled Cambodian goods worth $5.8 billion to be exported to the largest trading bloc in the world. (Nov 15, 2019 | Khmer Times)

TRADE & COMMERCE | New Commerce Laws Come into Effect

The much-awaited e-commerce and customer protection laws came into effect on Nov 2 after the drafts were signed by King Norodom Sihamoni. Composed of 12 chapters and 67 articles, the E-Commerce Law aims to promote trade via electronic means and addresses key topics like electronic signatures, which are seen as an important tool in making electronic transactions more secure. The government has announced a six-month moratorium to promote the law to the public before implementation begins. The Customer Protection law is composed of 11 chapters and 51 articles and its goal is to create a level playing field for businesses and protect consumers by reducing unethical and illegal retail and promotional practices. (Nov 13, 2019 | Khmer Times)

TOURISM | Leading Thai Travel Company Expands into The Kingdom

Go Vacation, a leading Thai travel management company, has expanded into Cambodia. Bampenh Ho, who has been appointed to oversee the firm’s Cambodia operations, confirmed in a phone call they already have a presence in the Kingdom. “Yes, we started this month,” she said. Ms Ho did not specifically mention the reasons, but it is believed that Cambodia’s rapid economic growth and boom in its tourism industry factored in Go Vacation’s decision to expand into Cambodia. Cambodia’s economy is among the fastest-growing in the world. The Asian Development Bank (ADB) has projected it will grow by 6.8 percent next year. Fuelled by greater foreign interest and more flights to and from the country, Cambodia’s tourism industry has experienced unprecedented growth in the last few years. In addition to Thailand, Go Vacation has a presence in Vietnam, Indonesia, Sri Lanka, and India. The company has 20 offices in six countries. ( Nov 15, 2019/ Khmer Times)

FINANCE AND BANKING |Korea Supporting Development Of Interbank Market

The National Bank of Cambodia and the Bank of Korea on Friday kicked off the final seminar on improving the local interbank market. The central banks are working together to boost Cambodia’s interbank market using Korea’s experience as a model. The cooperation is part of the 2019 NBC-BOK Knowledge Partnership Programme. This year, researchers from Seoul National University and the National Bank of Cambodia have performed an in-depth study on ‘Interbank Market Development.’ The aim is to provide recommendations to NBC regarding financial instruments, infrastructure, and platforms that can aid the development of the interbank market. “The programme represents a significant step in the development of the interbank market in Cambodia, which plays a key role in implementing monetary policy through the interest rate transmission channel,” said Neav Chanthana, Deputy Governor of the National Bank of Cambodia. (Nov 13, 2019/Khmer Times)

FINANCE AND BANKING | Banks to Expand Amid Sound Macroeconomy

Some of Cambodia’s largest banks and financial institutions have announced plans to expand their businesses following solid macroeconomic performance so far this year. The National Bank of Cambodia (NBC) in July projected that the Kingdom’s economy is poised to have grown 7.1 per cent this year. Advanced Bank of Asia Limited (ABA) marketing head Igor Zimarev told The Post that the bank has seen very strong growth, with the number of customers increasing 76 per cent last year and by 72 per cent between January and early this month. “To support that growth, we opened 15 branches in 2018 and 11 more this year, with several of them in Phnom Penh. This has led to an increase in bank deposits – within this year, our total deposits grew 50 per cent to $1.1 billion,” Zimarev said. (Nov 13, 2019/Phnom Penh Post)

REAL ESTATE AND CONSTRUCTION| Koh Kong Airport to Be Ready in Three Years

The Dara Sakor International Airport, which is now being built in the southwestern province of Koh Kong, will be ready in the next three years, according to the Minister of Aviation. The airport is being raised near the Dara Sakor resort, which Prime Minister Hun Sen earlier this year hailed as a “luxury eco-tourism destination” that will put Koh Kong on the map for international tourists. The airfield, a project of Chinese-owned Union Development Group (UDG), will be able to handle long-haul aircraft like Boeing 777 and Airbus A340. It will be located on Koh Kong’s Botum Sakor district, where the company was given a 99-year concession in 2008. The Minister of the State Secretariat of Civil Aviation (SSCA) Mao Havanall told Khmer Times on Friday that construction of the Dara Sakor International Airport is going according to schedule. (Nov 14, 2019| Khmer Times)

REAL ESTATE AND CONSTRUCTION| Developers Should Consider “Exclusive Sales Agreement” Say Property Experts

Cambodia has seen rapid growth in the past years, especially in the real estate sector. Thousands of new buildings are built across the country, mainly in Sihanoukville and Phnom Penh. Real estate agencies and agents play an important role as they help these projects to carry on their plans with sales. The growth of the real estate industry has led to an increasing number of real estate agencies and agents and intense competition among them. However, some property experts say developers should consider offering an “exclusive sales agreement” to a particular agency for a better sales outcome. According to Mr. Kim Heang, CEO of Khmer Real Estate, having one agency to represent developers is better than having multiple agencies because they will be more committed to promote and sell projects. (Nov 13, 2019| Khmer Times)

CAMBODIA  Selected  Indicators

2013

2014

2015

2016f

2017f

2018f

 

Real GDP growth, at constant market prices

7.4

7.1

7.0

7.0

6.9

6.9

 

Private  Consumption

5.8

4.5

5.9

2.4

2.3

2.2

 

Government   Consumption

5.2

2.4

4.4

3.8

10.3

14.5

 

Gross Fixed Capital Investment

15.3

9.1

10.6

8.1

9.7

16.8

 

Exports, Goods and Services

14.0

11.3

7.2

9.5

8.1

8.3

 

Imports, Goods and Services

15.1

10.1

6.5

5.9

5.8

7.9

 

Real GDP growth, at constant factor prices

7.4

6.9

6.9

6.9

6.9

6.9

 

Agriculture

1.6

0.3

0.2

0.4

0.3

0.7

 

Industry

11.0

9.8

11.7

11.4

9.0

7.7

 

Services

8.7

8.7

7.1

6.8

8.5

9.1

 

Inflation (Consumer Price Index)

2.2

1.7

1.3

3.2

3.4

3.5

 

Current Account Balance (% of GDP)

-9.5

-9.0

-8.5

-8.4

-8.5

-8.7

 

Financial and Capital Account (% of GDP)

15.2

14.6

14.1

13.4

12.0

10.8

 

Net Foreign Direct Investment (% of GDP)

11.8

10.0

9.1

8.5

8.2

7.0

 

Fiscal Balance (% of GDP)

-6.5

-3.8

-2.0

-2.9

-4.9

-4.9

 

Debt (% of GDP)

31.6

31.8

32.1

32.6

33.3

34.0

 

Primary Balance (% of GDP)

-5.8

-3.1

-1.7

-2.5

-4.6

-4.6

 

Sources: World Bank, Macroeconomics and Fiscal Management Global Practice, and Poverty Global Practice.

DISCLAIMER

The report is produced based on material compiled from data considered to be reliable at the time of writing. Information and opinions expressed, however, will be subjected to adjusted at short notice. We do not accept any liability directly or indirectly that may arise from investment decision-making based on this report while we tend share as your information only.

 

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