Nearing lower-middle income

Jul 30th at 11:22
30-07-2015 11:22:29+07:00

Nearing lower-middle income

Cambodia is expected to reach a GDP per capita of $1,220 this year, putting it on course to being a lower-middle income economy, said Commerce Minister Sun Chanthol, who was attending a meeting with Macau entrepreneurs in Phnom Penh yesterday.

Based on a Ministry of Economy and Finance projection, the figure will be a jump from the 2014 estimate that put the GDP per capita at $1,123 for last year.

Srey Chanthy, an independent economic analyst, said given Cambodia’s growth trajectory for the first half of this year – in particular agricultural and garment exports, tourism and construction – this projection “might be realistic”.

According to Chanthy, as long as income growth outpaced inflation the country could graduate to lower-middle income status soon.

“Cambodia will still receive good treatment in terms of trading arrangements, but it may see reduced grants from donors,” Chanthy said.

“Of course, it will be able to continue borrowing soft loans.”

Despite big improvements in alleviating poverty, latest figures show that Cambodia still has 17.7 per cent of its population below the 2012 poverty line of $1.20 per person per day, according to the World Bank.

In order to make this growth inclusive, Grant Knuckey, CEO of ANZ Royal Bank, said a skilled workforce will be needed to sustain development and not just “simply construction and consumption, which are big drivers currently”.

“Inclusive growth at this stage of Cambodia’s development is really about education and skills development rather than classic redistribution of wealth,” he added.

While Chanthol referenced GDP per capita estimates, the World Bank bases a country’s income status on the gross national income (GNI) per capita, which is a nation’s total income divided by its population.

In its forecast for 2015, it projected that Cambodia’s GNI per capita will be $1,096 making it a low-middle income economy, above the bank’s threshold of $1,045 per capita.

The outlook went on to say that this graduation will result in fewer grants and will require an enhanced use of loans with “a focus on quality monitoring for greater development impact”.

Keat Chhon, permanent deputy prime minister, said Cambodia was set to become a middle income country by 2030, and policies, like the Industrial Development Policy, will propel the country high-income status by 2050.

“The Industrial Development Policy is the main framework in creating value added into products of Cambodia, to make the sustainability of industry development by connecting of the supply chain in the region and the world as well as to mainly focus on development of agro-agriculture,” he said.

In its Cambodia Economic Update, the World Bank estimated that the Kingdom’s projected GDP growth will fall slightly to 6.9 per cent in 2015 from the 7 per cent it was estimated to grow in 2014.

phnompenh post



NEWS SAME CATEGORY

Chinese loan for rice sector on hold

A project to build 10 warehouses to store rice paddy using Chinese funding has hit a roadblock, as the Cambodian government has been unable to meet criteria set by...

Gov’t prepares its tourism strategy for 2020

The Cambodian government has finalised a five-year Tourism Marketing Strategy that it hopes will help lure more visitors and investors to the Kingdom.

Japan wraps up tax audit project

Cambodia’s General Department of Taxation and the Japan International Cooperation Agency yesterday completed a more than three-year project to improve taxpayer...

Jewellery potential on show

At the opening of the 7th Cambodia International Gems and Jewellery Fair, Deputy Prime Minister Men Sam An said that despite lagging behind Thailand and Vietnam...

New electronics manufacturer due at PPSEZ

Thai-listed electronics manufacturer, SVI Public Limited, will be next in line to join Cambodia’s emerging light-manufacturing industry.

Wage-increase impact up for debate

Recent data from the International Labour Organisation say that despite implementing a $128 minimum wage in January, the Kingdom’s garment and footwear sector has...

Direct China cargo on course

Two Chinese shipping giants will soon sign agreements with Sihanoukville Autonomous Port (SAP), paving the way for exporters to move cargo directly from Cambodia to...

Russians, locals top Sihanoukville tourists

Around 900,000 people, led by Russian tourists, flocked to the coastal tourist city of Sihanoukville during the April to June period this year, according to the...

Seafood, tourism, rice top Russia’s trading wish list

Russia is looking to up its investment in agricultural products, mainly rice and seafood, and the tourism sector in the Kingdom, after Russian Minister for...

Law on food safety edges closer to approval

The UN’s Food and Agriculture Organization and the Ministry of Commerce held a workshop yesterday to garner feedback from NGOs and businesses on the draft National...


MOST READ


Back To Top