Cambodia: Immunisation campaign a shot in the arm for the economy, ADB says

The Asian Development Bank says Cambodia’s economy will recover strongly next year. It said gross domestic product will expand by 5.5 percent compared with 2021, unchanged from its April survey. The bank says one of the main reasons for the recovery from last year’s 3.1 percent contraction and this year’s ADB forecast of 1.9 percent growth is the Kingdom’s successful vaccination campaign.

Around 80 percent of Cambodia’s 16 million population have been vaccinated against Coronavirus at least once. Nearly 70 percent have received two doses. The Kingdom is now vaccinating young children as it reopens schools and is ready to give booster shots to adults next month as they near the six-month point since their second jab.

“The road out of Covid-19 vaccinations is on track and that will position the economy to open and grow stronger next year,” said Poullang Doung, Senior Economics Officer at the ADB Cambodia Resident Mission.

The country is close to herd immunity where, theoretically, enough people have been immunised to stop the spread of Covid-19.

That puts Cambodia on course to reopen to foreign tourists and get garment production back up to speed, creating jobs and cash in its key breadwinning industries. It is also modernising farm practices and focussing on sustainable agriculture, another key cash crop.

“Uncertainty remains the key risk to the outlook,” Doung said. “That includes new virus variants that can overcome vaccine defences, a rapid rise in non-performing loans when the loan restructuring programme phases out [at the end of this year] and a sharp adjustment in the construction and real estate sector.”

He recommended the government continue helping the Kingdom’s poorest by providing targeted social assistance to ensure the benefits of a strong recovery are felt by all Cambodians.

The ADB’s 5.5% growth forecast for Cambodia next year means the country should outstrip much of Developing Asia, forecast to see 5.4 percent growth in 2022 and do far better than the 5 percent forecast for Southeast-Asia’s collective GDP growth.

The bank cut its regional forecast by 0.1 percent compared with April because it says many Southeast-Asian nations have been slow to roll out their vaccination campaigns and “continue to grapple with new virus variants, continued lockdowns and restrictions.”

If Cambodia’s GDP grows 5.5 percent next year it will surprise the government on the upside. Deputy Prime Minister and Minister of Economy and Finance Aun Pornmoniroth said last month the economy was likely to grow 4.8 percent in 2020.