Charting Cambodia s Economy Designed to help executives catch up with the economy and incorporate macro impacts into company s planning. Annual subscription includes 2 semiannual issues published in June and December.
TABLE OF CONTENT Economic Profile 1 Economic Structure 2 Competitiveness 3 Economic development Part of the country s economic profile, economic structure section gives readers useful views to understand what matters for the Cambodian economy. What is the size of the Cambodia s economy in relation to world s major economies? What is the size of Cambodia s population? What is the demographic structure of Cambodia? Is it favorable for economic growth? How has the structure of Cambodia s GDP changed over the years? How much does the Cambodia s economy rely on external trade? Which sectors matter most to the economy? Part of the country s economic profile, this section explores Cambodia s competitiveness in the global level. It also covers the country s attractiveness to foreign direct investment. Which stage of economic development is the Cambodia s economy in? How is the average wage in Cambodia compared to others in the region? How has the labor productivity in Cambodia changed over the years and in relation with comparable countries? How competitive is Cambodia? How are Cambodia s competitive factors compared to those of other countries? Is it easy to do business in Cambodia? What are most problematic factors in doing business in Cambodia? How good is Cambodia in attracting Foreign Direct Investment? Part of the country s economic profile, this section explores Cambodia s average income and its distribution, poverty as well as other development indicators. What is the level of income for an average person in Cambodia? Is there still a lot of poor people in Cambodia? How does it compare to others? Is unemployment the issue for Cambodia? How is income distributed in Cambodia and how does it compare to others? What is the current level of human development in Cambodia? How has quality of life in Cambodia changed over the years?
TABLE OF CONTENT Economic Outlook 4 Economic Growth 5 Macro Risks Appendices Part of the country s economic outlook, this section explores Cambodia s recent economic growth, its key drivers and well as the growth outlook for the coming years. What has been the growth rate of Cambodia s economy over the past 10 years and how does it compare with others? What were the key growth drivers for the Cambodia s economy in the past year? What were the source of growth for Cambodia s economy in the last 5 years? What is the growth outlook for Cambodia s economy over the next 3 years and how does it compare with others? This section explores Cambodia s macroeconomic risks, including inflation, financial sector, budget deficit as well as balance of payment and exchange rate. What is the risk of inflation in Cambodia and how does it compare with others? What is the fiscal risk in Cambodia? What is the balance of payment risk for Cambodia? How good is the country in getting foreign exchange by the mean of commerce? Does Cambodia have enough international reserves to service its debt and for import? What is the FX risk? How has the KHR performed compared to other currencies? Appendix 1: Key projections from latest IMF s world economic outlook report. GDP growth Inflation Population Unemployment rate Government budget and debt Current account Appendix 2: World Bank s Doing Business Report Detailed rankings and scores for Cambodia and comparable economies. Starting a business Dealing with construction permits Getting electricity Registering property Getting credit Protecting Minority Investors Paying taxes Trading across borders Enforcing contracts Resolving Insolvency
Within ASEAN, Cambodia s economy is only bigger than Laos and Brunei 2015 GDP USD billion, Market Exchange Rate US China Japan Germany UK ASEAN* France India Italy Brazil* Canada Korea* Russia Australia Spain Mexico 4,123 3,358 2,849 2,436 2,422 2,091 1,816 1,773 1,552 1,377 1,325 1,224 1,200 1,144 10,983 17,947 Indonesia* Thailand* Malaysia* Singapore* Philippines Vietnam Myanmar Cambodia* Laos* Brunei* 395.3 296.2 292.7 292.0 191.5 67.0 18.2 12.5 11.8 859.0 Measuring the size of an economy Size of any economy is usually measured by calculating its Gross Domestic Product (GDP) which is the market value of all officially recognized final goods and services produced within a country in a given period of time. To compare GDP internationally, there is a need to convert value in local currencies to one main currency, normally USD. There are two popular exchange rate to be used. The first one is the official exchange rate for that particular period. The second one is the so called Purchasing Power Parity exchange rate, which takes into account the difference in living expenses between countries. The first method is more popular in comparing the size of each economy. Size of Cambodia s economy Using the market exchange rate method, Cambodia s GDP is estimated to be around USD 18.3 billion in 2015, only bigger than Laos and Brunei. Note: (*) IMF Estimate Source: IMF World Economic Outlook Database April 2016 Charting Economy This is a licensed product and is not to be photocopied 6
Wages in Cambodia is one of the lowest in Asia and ASEAN Average monthly wages in Asia and the Pacific 2013 or latest available year (US$) Australia (2013) Singapore (2013) New Zealand (2013) Japan (2013) South Korea (2013) Hong Kong (2013) Malaysia (2013) 651 1,780 2,841 3,419 3,320 3,694 4,642 International Wage Comparison Due to differences in definitions and coverage, comparing average wages across countries is not always straightforward. The chart presents information on wage levels for countries with broadly comparable data, compiled by International Labor Organization from comprehensive National Labor Force Surveys. China (2013) Samoa (2012) Mongolia (2012) Thailand (2013) India (2011/12) 613 565 411 391 215 Wages in Cambodia Average monthly wages in Cambodia in 2012 was around USD 121, or two third of Indonesia s. Wages in Cambodia is almost the lowest in ASEAN and in Asia. Philippines (2013) 215 Vietnam (2013) 197 Indonesia (2013) 183 Cambodia (2012) 121 Pakistan (2013) 119 Nepal (2008) 73 Source: ILO Global Wage Report 2014/15 Asia and the Pacific Supplement Charting Economy This is a licensed product and is not to be photocopied 14
Cambodia s fiscal situation is improving drastically in 2014 with lower budget deficit Cambodia s General government budget balance* % of GDP 0.0% -1.0% -2.0% -3.0% -4.0% -5.0% Projected General government structural balance** 2016, % of GDP -2.5-2.7-2.9-3.4-3.7-0.1-0.6-1.1 2.1 Singapore Thailand Philippines Euro area Advanced economies Indonesia China United States Malaysia Projected General government debt** 2016, % of GDP 43.7 35.7 27.6 46.8 55.8 98.2 92.5 106.6 107.5 Fiscal or Government budget balance Budget balances are the government revenues net of the government expenditures. When compared across countries, it is commonly standardized in the form of percentage of GDP. Public debt Public debt includes direct government debt, debt of State Enterprises and others. When compared across countries, it is commonly standardized in the form of percentage of GDP. -6.0% -7.0% -8.0% -7.0-4.5 Japan India Brunei Darussalam Cambodia 3.9 33.4 66.5 249.3 Cambodia s fiscal situation Cambodia s fiscal situation is improving drastically in 2014 with lower budget deficit. Its relatively low public debt also helps. -9.0% -10.0% 2005 2007 2009 2011 2013 Lao P.D.R. Myanmar Vietnam 32.0 64.1 62.4 Note: (*) Excluding cyclical and extraordinary income/expenses (**) Forecasted by IMF in World Economic Outlook report, April 2016 Source: Asian Development Bank, IMF Charting Economy This is a licensed product and is not to be photocopied 36
Starting a business in Cambodia is harder than in any other ASEAN country Starting a business rank Economy Rank DTF* Procedures (number) Time (days) Cost (% of income per capita) Paid in min. capital (% of income per capita) New Zealand 1 100.0 1.0 0.5 0.3 0.0 Hong Kong SAR, China 4 98.1 2.0 1.5 1.2 0.0 Singapore 10 96.5 3.0 2.5 0.6 0.0 Australia 11 96.5 3.0 2.5 0.7 0.0 Malaysia 14 95.3 3.0 4.0 6.7 0.0 Korea, Rep. 23 94.4 3.0 4.0 14.5 0.0 Brunei Darussalam 74 87.6 7.0 14.0 1.2 0.0 Japan 81 86.3 8.0 10.2 7.5 0.0 Thailand 96 85.1 6.0 27.5 6.4 0.0 Timor Leste 104 83.6 4.0 9.0 0.3 156.6 Vietnam 119 81.3 10.0 20.0 4.9 0.0 China 136 77.5 11.0 31.4 0.7 0.0 Lao PDR 153 73.8 6.0 73.0 4.9 0.0 India 155 73.6 12.9 29.0 13.5 0.0 Myanmar 160 70.0 11.0 13.0 97.1 0.0 Philippines 165 68.6 16.0 29.0 16.1 3.3 Indonesia 173 66.0 13.0 47.8 19.9 31.0 Cambodia 180 58.1 7.0 87.0 78.7 24.1 Central African Republic 189 31.4 10.0 22.0 204.0 540.1 Starting a Business This topic measures the paid-in minimum capital requirement, number of procedures, time and cost for a small- to medium-sized limited liability company to start up and formally operate. To make the data comparable across 189 economies, Doing Business uses a standardized business that is 100% domestically owned, has start-up capital equivalent to 10 times income per capita, engages in general industrial or commercial activities and employs between 10 and 50 people one month after the commencement of operations, all of whom are domestic nationals. The most recent round of data collection for the project was completed in June 2015. Starting a Business in Cambodia Starting a business in Cambodia is harder than in any other ASEAN country. Note: (*) An economy s distance to frontier score is indicated on a scale from 0 to 100, where 0 represents the worst performance and 100 the frontier Source: Doing Business 2016: Measuring Regulatory Quality and Efficiency Charting Economy This is a licensed product and is not to be photocopied 44
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