The Kingdom’s inflation will remain stable in the current year as well as the next year although there are concerns about the inflationary pressures caused by El Nino, high oil price and global economic uncertainties, according to Asean+3 Macroeconomic Research Office (AMRO) Chief Economist, Hoe Ee Khor.
This came as AMRO launched its October 2023 economic outlook for the Asean region plus Hong Kong, China, Japan and Korea.
“Cambodia’s inflation will stand at 2.8 percent in the current year and it will grow to 3 percent in the next year as per our estimates. And this is one of the most stable inflation rates in the region,” Hoe said.
However, he warned that there are many concerns despite the country maintaining its inflation under stable limits.
“The country has a highly dollarised economy and the use of US Dollar could bring inflationary pressures from the US economy. The impact of commodity prices on regional inflation will be sharper if the strength of the US dollar relative to the region’s currencies continues.”
He pointed out that El Nino is the wild card for inflation. “El Nino could lead to a price rise for food items owing to less production and restrictive trade practices caused by the climatic phenomenon.”
El Nino is a climate pattern that defines the unusual warming of surface waters across seas, especially in the eastern equatorial Pacific Ocean. La Nina, the colder counterpart of El Nino, is a climate pattern that describes the cooling of surface-ocean water along the tropical west coast of South America.
The last El Nino event occurred in the Kingdom in 2019/2020 with many water bodies including the tributaries of Tonle Sap Lake drying up, creating trouble for farmers and fishermen across provinces. Rice production losses caused by droughts during this period have been estimated at $100 million in the Kingdom. Source: amro
