Category: Economy

A delegation from Jiangxi Provincial Building Material Group, Ltd., led by President Wensheng Chen, met with the Cambodian Investment Board last week to explore potential investment opportunities, including the establishment of a cement factory in Cambodia.

The meeting took place at the Council for the Development of Cambodia (CDC) office, where H.E. Chea Vuthy, Secretary-General of the Cambodian Investment Board, warmly welcomed the delegation. He provided an overview of Cambodia’s investment landscape, highlighting the country’s open and transparent investment laws, political stability, and the recent surge in Chinese investment.

Jiangxi Provincial Building Material Group, a leading cement producer in China, is considering expanding its operations to Cambodia. Mr. Chen expressed enthusiasm about Cambodia’s rapid development and the potential for future growth, stating that the company is keen to learn more about the local investment environment.

Secretary-General Chea Vuthy expressed strong support for the potential investment, emphasizing its importance in boosting Cambodia’s industrial and construction sectors. He also encouraged the company to adopt modern, eco-friendly technologies to minimize environmental impact. The CDC assured the delegation of its commitment to providing all necessary support to facilitate the investment.

The visit marks a significant step forward in strengthening economic ties between Cambodia and China, with the potential cement factory poised to play a crucial role in Cambodia’s infrastructure development.

The Asian Development Bank (ADB) has approved a $93.6 million financing package, including loans and grants, aimed at improving and expanding climate-resilient and inclusive water, sanitation, and hygiene (WASH) services for 88,000 households across 400 villages in 50 communes, spanning nine provinces in rural Cambodia.

The initiative, known as the Rural Water Supply, Sanitation, and Hygiene Improvement Sector Development Program, aligns with government efforts to achieve universal access to safe water supply and basic hygiene in rural areas. The program also seeks to improve access to safely managed sanitation facilities while ensuring affordability for all communities.

A key component of the program is fostering private sector involvement in the provision of water supply services. Additionally, the program prioritizes the climate resilience of WASH infrastructure by incorporating climate change considerations into the planning, design, and implementation stages. Strengthening coordination among stakeholders and decentralizing responsibilities are also integral to the program’s approach to ensuring effective service delivery.

“The program supports the ‘WASH for All’ initiative by focusing on rural populations in remote areas. It proposes reforms to enhance governance in community-managed WASH facilities and aims to scale up government planning for sustainability and climate resilience,” said Jyotsana Varma, ADB Country Director for Cambodia.

The program includes a $3 million grant from the Japan Fund for Prosperous and Resilient Asia and the Pacific, specifically allocated to expand WASH facilities in provinces where access to safe water, sanitation, and hygiene remains a significant challenge for the poor. The targeted provinces include Banteay Meanchey, Battambang, Kampong Speu, Kampot, Kratie, Oddar Meanchey, Pailin, Preah Vihear, and Stung Treng.

Additionally, a $600,000 technical assistance grant from the Sanitation Financing Partnership Trust Fund under the Water Financing Partnership Facility will enhance the government’s capacity to implement crucial sector reforms outlined in the program.

As of 2022, access to safely managed water supply in Cambodia stood at 29% nationally, with rural areas lagging at just 20%. Access to safely managed sanitation was 37% nationwide, and 34% in rural regions. Open defecation remains prevalent, affecting approximately two million rural residents, posing significant risks of contamination and waterborne diseases.

ADB has been a longstanding partner in advancing Cambodia’s WASH sector since 2005, benefiting over one million people, particularly in the provinces surrounding the Tonle Sap Lake.

ADB remains committed to fostering a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while continuing its mission to eradicate extreme poverty. Established in 1966, ADB is owned by 68 members, 49 of which are from the region.

A senior official from the National Bank of Cambodia (NBC) have urged all stakeholders—including financial institutions, regulators, government agencies, and international partners—to collaborate in building a robust financial ecosystem. This initiative aims to address the rapid economic changes and emerging risks currently faced by both global and regional economies.

Mr. Em Kamnan, Deputy Director General of NBC, made this call during the opening ceremony of the 3rd Banking Conference in Cambodia 2024. The event, themed “Financial Sector Unity: Strengthening Cooperation to Build a Solid Financial Foundation,” was organized by the Association of Banks in Cambodia (ABC) and took place on August 22-23, 2024.

“As we gather here today, it is evident that our world is undergoing swift transformations,” Mr. Kamnan stated. “Global economic shifts, technological advancements, and unforeseen challenges—such as pandemics and climate change—highlight the necessity for a strong and adaptable financial system.”

He acknowledged that while Cambodia has made significant progress in developing its financial sector, now is the time to accelerate efforts to establish a foundation capable of withstanding future uncertainties. “Our banking sector has seen remarkable growth in recent years, reflecting the resilience and adaptability of our financial institutions. However, this growth comes with the responsibility to ensure our banking system is not only thriving but also resilient against both domestic and global challenges,” he added.

To achieve this goal, Mr. Kamnan emphasized the importance of a holistic approach to the financial sector. “We must strengthen cooperation among banks, financial institutions, regulators, government bodies, and international partners. Fragmented strategies leave us vulnerable to systemic risks and inefficiencies that could impede economic progress.”

“When we unite our resources, expertise, and ideas, we can create a resilient and integrated financial ecosystem capable of fostering sustainable growth,” he asserted.

Mr. Rath Sophoan, Chairman of the Association of Banks in Cambodia said that according to a World Bank report for the first half of 2024, Cambodia’s economic growth is projected to average 5.8%, an increase from 5.6% in 2023. This growth is attributed to a recovery in garment exports, travel goods, footwear exports, and tourism.

However, Mr. Sophoan noted that due to Cambodia’s small and open economy, it has also faced negative impacts from various global challenges. Despite these obstacles, the banking sector remains resilient and continues to expand. He reported that banking sector assets have increased by approximately 15%, with a capital adequacy ratio exceeding 22%. The liquidity coverage ratio (LCR) stands at 179%, and non-performing loans (NPLs) account for 6.8%. Consumer loans have risen by 12% compared to the previous year.

Looking ahead to the second half of 2024, Mr. Sophoan expressed optimism as inflation has slowed and the riel exchange rate against the dollar has stabilized. He also highlighted that numerous public projects implemented by the Royal Government are positively impacting the local economy.

Global Finance Magazine recognizes Dr. Chea Serey, the Governor of the National Bank of Cambodia (NBC), as a Level A Central Bank Governor in Asia, the United States, and Europe for her achievements in developing an environmentally friendly financial sector by embracing financial technology (Fintech).

According to a Global Finance press release dated August 19, Dr. Chea Serey was ranked Level A among 25 governors from Asia, the Americas, and Europe. This ranking reflects her accomplishments in controlling inflation, contributing to economic growth, ensuring monetary stability, and managing exchange rate stability.

“The central bank has struggled against inflation in recent years, using rising interest rates as their primary weapon. Countries around the world are now seeing tangible results from these efforts as inflation has plummeted. We honor these bank leaders for their leadership, creativity, and perseverance,” said Joseph Giarraputo, founder and CEO of Global Finance.

Dr. Chea Serey was appointed by the King through a Royal Decree on July 29, 2023, as the Governor of the National Bank of Cambodia. She has worked for NBC for over a decade, promoting the use of the local currency to enhance national independence in economic and monetary policy.

She is also developing a state-of-the-art retail payment infrastructure with the introduction of a national Swiss system for card transactions and instant payment systems, allowing real-time money transfers between bank accounts in Cambodia. Additionally, she launched the Bakong payment system.

Mr. Touch Chao Chek, CEO of the Post Bank of Cambodia, told Investing Cambodia on August 22 that receiving this honor from an international institution reflects Dr. Chea Serey’s professionalism and leadership skills. She has dedicated decades to this industry.

“Dr. Chea Serey is promoting the development of this sector, particularly through her achievements in advancing Fintech for the financial environment and enhancing financial literacy,” he stated. “An important accomplishment under her leadership is the development of the Bakong system, which significantly contributes to the advancement of digital payments.”

Royal Group International, Cambodia’s leading diversified conglomerate, is thrilled to announce the signing of a landmark partnership with Marriott International to bring The Ritz-Carlton to the heart of Phnom Penh. This momentous occasion marks the grand entrance of The Ritz-Carlton, a globally renowned luxury brand, into the Kingdom of Cambodia. The dual-branded Ritz-Carlton Hotel & Residence is set to redefine the standards of luxury and sophistication in the country.

Oknha Kith Sula, Chief Operating Officer of Royal Group International, is proud to announce this new partnership. “It materializes over 6 months of intense work to strategically position our development. The choice to partner with The Ritz-Carlton reflects our ambition for excellence, and legacy of pushing boundaries through innovation. It is the first milestone of a new era for the Cambodian hospitality sector!”, said Oknha Kith Sula. Nestled in the heart of the capital, The Ritz-Carlton Phnom Penh will offer an unparalleled vantage point with unrivaled views of the city’s most iconic monuments, including the Royal Palace and the majestic Mekong River. This prestigious development is poised to become a new landmark, setting a new benchmark for luxury hospitality in Cambodia and Southeast Asia.

Neak Oknha Kith Meng, Chairman & CEO of the Royal Group of Companies, expressed his profound excitement about this significant milestone, stating, “We are extremely pleased to announce the opening of The Ritz-Carlton Phnom Penh, a project that epitomizes our vision to push boundaries, exceed expectations, and raise standards to an unprecedented level. This iconic development will not only elevate Cambodia’s hospitality and real estate sectors, but will also offer our clientele a unique palace experience that is second to none. We are committed to delivering excellence in every aspect, ensuring that The Ritz-Carlton Phnom Penh becomes a beacon of luxury in the region.”

This partnership underscores Royal Group’s commitment to supporting Samdech Moha Borvor Thipadei HUN MANET Prime Minister of the Kingdom of Cambodia’s strategic vision for the tourism sector. The Prime Minister has made the tourism sector a key to boosting the national economy. This new Property Project, which has already commenced construction, will play a pivotal role in making the Kingdom a priority destination for luxury travelers in Southeast Asia, further enhancing the country’s global standing, and magnifying Phnom Penh’s status as the “Pearl of Asia”. Furthermore, this project aligns with the Cambodian Government’s policies aimed at urban development, economic growth, and social stability through a significant capital investment and new employment.

The National Bank of Cambodia (NBC) and the United Nations (UN) in Cambodia have outlined five key priorities to improve the microfinance sector following concerns over rising indebtedness.

A joint statement released on July 24th detailed the outcome of a multi-stakeholder consultation process initiated in November 2023 to address the rapid growth of the microfinance sector and its potential impacts. The process involved extensive dialogue with over 100 stakeholders including government agencies, financial institutions, civil society, and development partners.

Five key priorities were identified:

• Strengthening regulation and supervision: Implementing a code of conduct, enhancing inter-agency cooperation, and establishing effective self-regulation.
• Protecting borrowers: Improving complaint mechanisms, creating a debt counseling service, and enhancing financial literacy.
• Enhancing industry data and standards: Collecting and sharing data, developing loan restructuring regulations, and standardizing microloan definitions.
• Addressing informal lending: Enforcing regulations on informal lending and clarifying local authority roles.
• Promoting inclusive finance: Piloting agricultural insurance, supporting the formation of agricultural cooperatives, and focusing on indigenous communities.

The joint statement emphasized a commitment to creating a fairer and more transparent financial sector that serves the needs of all Cambodians. The consultation process is ongoing, with the next meeting scheduled for January 2025 to assess progress.

The General Department of Taxation collected 1,917.96 million US dollars in all types of tax revenue, down slightly from the same period last year of 2,072.39 million US dollars.

According to a press release issued by the GTD on July 24, 2024, all types of tax revenue collected was 1917.96 million US dollars, equivalent to 46.06% of the financial plan for management. 2024.

Mr. Aun Pornmoniroth, Deputy Prime Minister and Minister of Economy and Finance, stated that this result showeds the efforts of the leadership and the contribution to perform their duties wholeheartedly, despite the difficult situation, risk and uncertainty of the economic and political situation. Universal anyway.

Mr.Moniroth also recommended to strengthen the dissemination and implementation of tax incentives to the private sector in the past and within the framework of the 19th Royal Government-Private Sector Forum under the chairmanship of the Prime Minister on the 13th. November last year.

Cambodia’s economy is projected to reach 6 percent by 2024, up from 5 percent by 2023.

The National Bank of Cambodia (NBC) has introduced four emergency mechanisms to facilitate the circulation of US dollars in Siem Reap. This initiative aims to address challenges associated with old, stained, or damaged US dollars, which have created transaction difficulties in the province.

On Sunday, July 21, 2024, under the recommendation of Prime Minister Hun Manet, H.E. Dr. Chea Serey, Governor of the National Bank of Cambodia, chaired a meeting to discuss facilitating US dollar banknote circulation in Siem Reap with banking and financial institutions. The meeting, held at the National Bank of Cambodia’s Siem Reap branch, included over 60 representatives from banking and financial institutions, as well as provincial authorities. The objective was to find a joint solution to ease the circulation of US dollars in Siem Reap.

During the meeting, the governor asked representatives about their principles regarding the operation of checking and accepting old and torn US dollars. She encouraged them to share their experiences, challenges, and difficulties encountered in receiving US dollars from customers.

After assessing the situation with accepting old or dirty US dollars in shops and private exchanges, and consulting with commercial banks, the National Bank of Cambodia introduced several measures to be implemented in Siem Reap, including emergency and follow-up mechanisms.

Emergency Mechanisms:

Siem Reap Commercial Bank branches are required to accept old or stained US dollars without charging any fees, unless the banknotes are counterfeit.

Very old dollar banknotes that should not continue to circulate can be exchanged for new banknotes at the National Bank of Cambodia’s Siem Reap branch free of charge, without the need to send them to the head office in Phnom Penh.

All banking and financial institutions in Siem Reap are required to deposit US $20 and US $50 banknotes instead of US $100 banknotes in ATMs to facilitate tourist spending. Deposits on deposit machines will still be accepted.

Efforts will be made to educate money changers, hotel and restaurant owners to understand and support these measures and cooperate with the National Bank of Cambodia in implementing these mechanisms.

Follow-Up Mechanisms:

Promote the use of the Bakong Tourist App to support tourism in Cambodia by facilitating payments for international tourists.

Collaborate with companies that sell counting machines to establish standards that align the counting machines of the National Bank and commercial banks.

Prime Minister Hun Manet commended H.E. Dr. Chea Serey for her swift action in setting guidelines to ease the distribution of old, stained, or damaged US dollar bills in Siem Reap. He noted that these difficulties had made it hard for people in the province to sell their products, as sellers had conveyed these problems to him during his visit to Pub Street on July 17, 2024.

“I hope that the actions of the National Bank of Cambodia will eliminate the difficulties associated with the issuance of US dollars and facilitate transactions for both locals and tourists in Siem Reap,” said the Prime Minister.

The Prime Minister instructed the NBC branches in Siem Reap, all private banks in Siem Reap, as well as private businesses and merchants, to participate in the new policy to avoid problems related to the distribution of old or stained dollars.

The Asian Development Bank (ADB) has marginally increased its economic growth estimate for developing Asia and the Pacific to 5.0% for this year, up from the earlier forecast of 4.9%. This revision is attributed to the rise in regional exports complementing strong domestic demand. The growth forecast for 2025 remains unchanged at 4.9%.

Inflation is anticipated to decrease to 2.9% this year, owing to falling global food prices and the ongoing effects of higher interest rates, as detailed in the latest edition of the Asian Development Outlook (ADO) released today.

After a post-pandemic recovery driven predominantly by domestic demand, a resurgence in exports is now propelling the region’s economic expansion. Increased global demand for electronics, especially semiconductors for advanced technology and artificial intelligence, is enhancing exports from several Asian countries.

“Most of Asia and the Pacific is witnessing faster economic growth compared to the latter half of last year,” said ADB Chief Economist Albert Park. “Although the region’s fundamentals are robust, policymakers need to stay alert to various risks that could impact the outlook, such as uncertainties related to election results in major economies, interest rate decisions, and geopolitical tensions.”

While inflation is gradually returning to pre-pandemic levels across the region, some economies continue to experience high price pressures. Food inflation remains significant in South Asia, Southeast Asia, and the Pacific, partly due to adverse weather and food export restrictions in certain countries.

The growth forecast for the People’s Republic of China (PRC), the largest economy in the region, is sustained at 4.8% for this year. Ongoing recovery in service consumption and stronger-than-anticipated exports and industrial activity are bolstering this growth, despite the PRC’s property sector still facing challenges. The government introduced new policy measures in May to support the real estate market.

India, the fastest-growing economy in the region, retains its growth projection of 7.0% for fiscal year 2024. India’s industrial sector is expected to expand robustly, driven by manufacturing and high demand in construction. Agriculture is also predicted to recover, supported by forecasts of an above-normal monsoon, with investment demand remaining strong, led by public sector investments.

For Southeast Asia, the growth projection is maintained at 4.6% this year, due to solid improvements in both domestic and external demand. The forecast for the Caucasus and Central Asia has been raised to 4.5%, up from the previous estimate of 4.3%, driven by stronger-than-anticipated growth in Azerbaijan and the Kyrgyz Republic. In the Pacific, the growth outlook for 2024 remains at 3.3%, fueled by tourism, infrastructure spending, and revived mining activity in Papua New Guinea.

The ADB remains dedicated to fostering a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while continuing efforts to eradicate extreme poverty. Established in 1966, the ADB is owned by 68 members, 49 of which are from the region.