Asia-Pacific economic growth is likely to slow to 4.3 percent in 2022 from a forecast of 5.6 percent this year, according to Moody’s Analytics. Cambodia may be spared from the slowdown if its assumptions hold true.
“Easing social distancing restrictions will allow domestic economies to accelerate,” said Moody’s Chief APAC Economist Steve Cochrane. “If social distancing is needed again in APAC, it will focus on the diminishing share of the population that is not vaccinated against COVID-19.”
Cambodia has fully vaccinated more than 86 percent of its 16 million-plus population, according to the Reuters Coronavirus Tracker, allowing the return of much-needed foreign tourists and the reopening of shuttered factories in key sectors like garment manufacturing.
“The region has been buoyed by its goods-producing industries, which accelerated in recent months because of both export volume and price effects. Indonesia, Taiwan, Australia and India have benefitted from high commodity prices. South Korea and Taiwan have enjoyed strong demand for semiconductors and other high-value machinery that command high prices given the global supply constraints. A belated improvement in exports from the Philippines helped its economy outpace expectations in the third quarter,” Cochrane said.
Cambodia’s exports are dominated by garments, footwear and travel goods. Overseas shipments rose 11.4 percent in the first nine months of this year, compared with the same period a year earlier.
Domestic demand will add to export-driven growth in the region through the first half of next year, Cochrane said.
“High-frequency mobility indexes show the potential for improving retail sales and other consumer spending with mobility for retail and recreation purposes rapidly approaching pre-pandemic levels,” he said.
Cambodia has moved far beyond the lockdowns that crippled the economy over the last two years, with bars, restaurants, cinemas and other entertainment facilities open again after pandemic-prompted closures.
“More important, employees are increasingly returning to their places of work, bringing life back to centres of office employment and accelerating manufacturing that is desperately needed to unclog supply chains,” Cochrane said.
Cambodia will need to do more than just rely on its successful vaccination campaign if it wants to remain open though. Cochrane used the example of Singapore, the only ASEAN member to have fully vaccinated more of its population, at more than 88 percent, according to Reuters.
“A high vaccination rate is not enough to stem the coronavirus and avoid social distancing and its damage to the economy,” he said. “Singapore…is just now managing to reduce its coronavirus caseload, which peaked in early November. This illustrates the greatest risk to the economic outlook—vaccinations may not be enough to buttress the economy against the next wave of Covid-19. But Singapore also has managed to reduce its ICU [intensive care unit] utilization rate to 58.5 percent as of November 18 from 83.6 percent on October 25 thanks to a reduction of ICU patients and to a 19 percent increase in total ICU beds.”
Countries like Cambodia, that have a less developed public health system, will need to adopt integrated public health policies including vaccination programs, improved public health system capacity, and targeted testing and tracing, Cochrane said.
This article was first published in Khmer Times. All contents and images are copyright to their respective owners and sources.
