PHNOM PENH, April 3 (Xinhua) -- After two decades of strong performance, Cambodia's economic growth is expected to drop to 2.3 percent in 2020 due to the COVID-19 pandemic, according to the Asian Development Bank (ADB)'s outlook report released on Friday.
"Cambodia's economy is expected to rebound to 5.7 percent in 2021, assuming that the pandemic ends and economic activity normalizes," Sunniya Durrani-Jamal, ADB's country director for Cambodia, said in a press release.
"Facing unprecedented challenges posed by COVID-19, the Royal Government of Cambodia has taken the right steps to respond to the crisis, including providing wage support for garment workers and tax and credit relief for businesses," she said. "The government has also created the fiscal space to minimize the economic impact of this crisis, especially on the most vulnerable people."
Cambodia's services sector is expected to contract by 1.7 percent in 2020, as tourism drops and growth in real estate slows, the report said.
It added that industry growth is forecast to slow to 6.5 percent, with deceleration in garment production for exports and slower growth in construction.
Inflation is expected to remain low, averaging 2.1 percent in 2020 and remain subdued in 2021, as international fuel prices remain low, the report said.
The report highlighted the government's commitment to diversifying the non-banking financial sector and developing local capital markets to provide much needed financing for diversified investment and growth.
Durrani-Jamal said the government's focus should be on COVID-19 containment, without which the recovery of the tourism and services sectors will be difficult.
She said the government can draw from a 6.5 billion U.S. dollars COVID-19 response package ADB announced on March 18 to meet the immediate needs of its developing member countries to stimulate their economies and provide social protection.
Cambodian Prime Minister Samdech Techo Hun Sen said last month that the government had reserved up to 2 billion U.S. dollars to support the economy in case of the prolonged outbreak of the COVID-19.
The Southeast Asian country has so far recorded a total of 114 confirmed cases of COVID-19, with 35 patients cured, said a Ministry of Health's statement on Friday.
