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Country Report Cambodia August 2017

Country Report Cambodia August 2017

  • August 2017
  • ID: 265628
  • Format: PDF
  • The Economist Intelligence Unit


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Outlook for 2017-21

  • The prime minister, Hun Sen, and the Cambodian People's Party (CPP) will remain in power. De facto one-party rule will persist given the heavy-handed suppression of the main opposition Cambodia National Rescue Party (CNRP).
  • There is no guarantee that the 2018 election will be as peaceful as the local ballot in June, as the stakes will be higher. Political intimidation by the CPP will persist and its threat to retain power by force if it loses remains credible.
  • The National Bank of Cambodia (NBC, the central bank) will manage a slowdown in rapid credit growth in 2017-21. Extensive dollarisation means that macroprudential measures will remain the mainstay of monetary policy.
  • Real GDP growth will strengthen in 2017-18, averaging 7.1% a year as global trade rebounds, household spending improves, and fiscal policy is loosened during the elections. Growth will temper thereafter as fiscal policy stabilises.
  • Inflation will subside in 2018, owing to a projected decline in global oil prices. Although oil prices will regain strength in 2019-21, cooling economic growth will keep consumer price inflation stable.
  • The current-account deficit will remain wide in 2017-21, averaging 9.4% of GDP. However, strong inflows of foreign direct investment, equivalent to 6.7% of GDP a year on average, will prevent any major financing difficulties.


  • On July 10th lawmakers from the ruling CPP signed off on more changes to the Law on Political Parties that will, in effect, ban the long-time opposition leader, Sam Rainsy, from further involvement in politics.
  • Kim Sok, a prominent government critic, was sentenced to 18 months in prison on August 10th after he accused Hun Sen's regime of involvement in the 2016 assassination of Kem Ley, a high-profile political activist.
  • On August 6th Hun Sen embarked on a four-day visit to Japan, during which the two sides signed agreements on Japanese foreign assistance worth more than US$240m.
  • The Ministry of Commerce issued a decree on July 20th requiring all businesses to list prices in riel rather than US dollars. It did not include any details of what punishments would be levied for non-compliance.
  • On August 2nd Cambodia's commerce minister, Pan Sorasak, and Bangladesh's food minister, Qamrul Islam, signed a deal for Bangladesh to purchase 1m tonnes of Cambodian rice over 2017-22.
  • In the first five months of 2017 close to 2.3m tourists visited Cambodia, representing an increase of 12.5% from the year-earlier period. China has been the largest source of arrivals, accounting for close to 20% of this amount.

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