Cambodia Economic Update - Weathering the Oil Price Shock : Special Focus - Post-Pandemic Supply Chain Disruptions : Strategies to Reduce Logistics Costs
Cambodia is now weathering an oil price shock, just as the economy had started to recover amid a rollback of Coronavirus (COVID-19)-related restrictions. Negative impacts of the oil price shock are amplified by Cambodia’s already large external imb...
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| Format: | Report |
| Language: | English en_US |
| Published: |
Washington, DC : World Bank
2022
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| Online Access: | http://documents.worldbank.org/curated/en/099315006282226217/P1773400c74b8e06308c8a00ff3a41dd50c http://hdl.handle.net/10986/37680 |
| Summary: | Cambodia is now weathering an oil
price shock, just as the economy had started to recover amid
a rollback of Coronavirus (COVID-19)-related restrictions.
Negative impacts of the oil price shock are amplified by
Cambodia’s already large external imbalances. Rising food
and energy prices have eroded household purchasing power.
International oil price increases are passing directly
through to domestic prices. Higher commodity prices
triggered by the war in Ukraine are expected to lead to
sizable fiscal impacts. Meanwhile, the “living with
COVID-19” strategy has enabled a reopening of the economy
since late last year. The economic recovery remains uneven.
Traditional growth drivers, especially the garment, travel
goods, and footwear manufacturing industries, continue to
expand. Rising inflationary pressures are posing serious
policy challenges for the Cambodian authorities. To this
end, it is crucial for the central bank to continue to be
committed to maintaining exchange rate stability. For the
government, it is important to avoid creating excess
aggregate demand, which might trigger undue domestic
inflationary pressures on top of the imported inflation. The
prospect of a protracted period of high inflation and a
sharp increase in global interest rates has significant
implications for Cambodia, whose economy is highly dollarized. |
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