KH Econ Monitor Feb2011

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Cambodia: Recent Economic Developments

World Bank Cambodia country officeSeventh edition, February, 2011


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Overview

growth at 10% during 2000-08, -2.0% in 2009; and6.7% projected in 2010 led by exports. Main drivers ofgrowth remains: agriculture, garment exports, andtourism, construction and banking.

economic downside risks are: (i) narrow base and highconcentration of garment exports to the US market; (ii)

weak fiscal position and aid dependent; (iii) stress onbanking sector; and (iv) continued uncertainty on globalenvironment especially food prices.

jobs markets recovered especially in exports orientedindustries (footwear and garments)

countercyclical response has been broadly appropriate;recent fiscal adjustment appears on track, growing

capital expenditures in recent years. monetary policy tightened with new policy of triplingbank capital requirement became effective January 1,2011. Inflation and asset prices should be monitoredclosely. Dollarization remains high hampering effectivemonetary policy.

Recovery firmed up. Risks have lowered but remain important in thebanking and fiscal sector. Inflation is low but deserves monitoring.

recent developments:

fiscal adjustments (unwindingfiscal stimulus)

rebound in credit and trade stable inflation

watch list:

inflation (asset price; domesticinflation; external shocks,including oil prices; exchangerate)

fiscal developments


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Table of contents

1. Global environment2. Overall growth and projections3. Real economy by sector and corporate sector4. Labor, income and poverty impact5. Price and monetary developments

6. Fiscal developments7. Balance of payments8. Policy response and challenges9. Background data

Note: this set of slides is prepared by the Cambodia country team and regularly updated.The first slides highlights recent changes / developments (e.g. newly available data)and key risks, while the rest of the slides reviews the main dimensions of the economy.


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1. global environment

global economic recovery advances but remains uneven(IMF-WEO Update Jan. 2011). The update estimates a5% world output growth in 2010 (after contracting 0.6% in2009) owing to stronger-than expected consumption inthe United States and Japan. Stimulus measures werepartly responsible for the strengthened outturn and globalfinancial conditions also broadly improved, amid lingeringvulnerabilities.

2011 prospect good with estimated global activityexpanding by 4.4% (of which 8.4% in developing Asia),reflecting strong exports and private domestic demand(as well as a new fiscal package passed late 2010 in theUS and a similar package passed in Japan)

IMF world economic growth projections

2009 2010 2011 2012World Output -0.6 5.0 4.4 4.5Advanced Economies -3.4 3.0 2.5 2.5

United States -2.6 2.8 3.0 2.7Euro Area -4.1 1.8 1.5 1.7Germany -4.7 3.6 2.2 2.0France -2.5 1.6 1.6 1.8Italy -5.0 1.0 1.0 1.3Spain -3.7 -0.2 0.6 1.5

Japan -6.3 4.3 1.6 1.8United Kingdom -4.9 1.7 2.0 2.3Canada -2.5 2.9 2.3 2.7Other Advanced Economies -1.2 5.6 3.8 3.7

Newly Industrialized Asian Economies -0.9 8.2 4.7 4.3Emerging and Developing Economies 2.6 7.1 6.5 6.5Source: IMF-WEO January 2011

Projections


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1. global environment, cont.

average crude oil prices rose by 20% (y-o-y)to US$93/b in January 2011 (from US$77/b inJanuary 2010) corresponding to increases ofall other commodity prices as oil prices mayhave contributed to increase the costs ofvarious types of foods.

global food prices continue to rise, hitting aworrying level, with World Banks measuredfood price index witnessed a jump of 15%

between October 2010 and January 2011 -only 3% below its 2008 peak.

the last six months have seen sharpincreases in the global prices of wheat, maize,sugar and edible oils, with a relatively smallerincrease in rice prices.

these food price rises would create macrovulnerabilities, particularly for countries with ahigh share of food imports and limited fiscalspace, as well as increases in poverty(estimated rising extreme poverty by 44million people in low- and middle-incomecountries).

commodity prices (2000-05 = 100)

key global commodity prices


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2. GDP growth

recovery firmed up for 2010, led by exports,although growth remains below its historical

average.key drivers of 2010 macroeconomic indicators

showed sign of recovery and a more rosyprospect for 2011.

growth is estimated to reach 6.0% in 2010,triggered by exports, tourism, agriculture andbanking and construction (both public and

private).

GDP growth (yoy %)


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3. garments

garment exports: 24% growth in 2010 (aftera 19% decline in 2009). 60% of Cambodiasgarment exports is shipped the US marketsand the US markets expanded by 19% in2010 over that of 2009. The industryemploys 5% of the employed populationand it created 38,000 new jobs sinceDecember 2009 recovered most jobs lostduring the 2009 economic downturn.

similarly, footwear exports (represents1%

of the employed population) picked up by57% in 2010 and mostly shipped to the EUmarkets (62% of total). Footwear industrycreated 18,000 new jobs since December2009.

Cambodia has 2.8% market share of USimports of garments (first 11-month of2010), slightly increased from 2.7% shareover the same period of 2009.

upbeat export prospect is projected partlybecause of benefit of the relaxed rule oforigin of the European Union onpreferential tariffs for LDCs to the EUmarkets which became effective onJanuary 1, 2011.

Garment imports in US market (3month, yoy growth %)

Garments exports (annual growth %)


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3. tourism

tourist arrivals show sign of solid recoverywith an y-o-y increase of 16% in 2010 overthat of 2009. A corresponding increase oftourism receipt of 14.4% to US$1.8 billionof over the same period.

tourist arrivals by air, picked up by 17% in2010 after a decline of 10% during the2009 economic crisis.

micro evidence shows strong signs of

recovery in low income workers mainlymotor-taxi drivers and small traders (CDRINov. 2010 surveys).

improvement of the tourism industry ishighly dependent on regional economiesas 72% of Cambodias tourist market comefrom the East Asia and Pacific. TheEuropean and American regions represent19% and 8% respectively. Other regionaccounted for about 1%.

Tourist arrivals (annual growth %)

Tourist arrivals by air (annual growth %)


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3. construction and real estate2005-08 construction boom led to overheating

in late 2007/early 2008; partly fueled by a realestate bubble. Things started to turnaround

after tumbling year in 2009.

New construction project approval rose by 10%in 2010 corresponding to a 5.5% increased ofimports of construction materials.

bank lending to construction sector rose by 9%and to real estate sector expanded by 7% in thethird quarter of 2010 compared to that of 2009.Further recovery is expected in 2011.

Recorded imports of consumer goods and constructionmaterials \ (cum 3 month; million riels)

Growth of construction projects approved in Phnom Penh

Phnom Penh real estate prices (Bonna Realty Group)Average land market prices (per Sq. meter)


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3. agriculture

a 5.3% agricultural production growthrecorded in 2010 (8 mill tons), contributingabout 1.7 percentage point to GDP growth.

The expansion is primarily led by paddyproduction.Cambodia initiated some diversification of

its production and export base, with volumeof milled rice exported almost tripling in2010, a positive reflection of the policystrategy on promotion of paddy riceproduction and export of milled rice,launched by government in August 2010.

in February 2010, government and theWorld Bank launched a risk sharing facilityscheme to help agribusinesses access tocredit by guaranteeing 50% of theparticipating banks and MFIs lending to thesector. This would further promote the

sector prospect in the coming years.well distributed rainfall and with increasinginvestment in irrigation by the governmentbrought about high rice yield in 2010.

an associated downside risk is itsdependency on weather conditions foragricultural productions.

Agriculture contributions to GDP, %)

Selected Agricultural Commodity Prices (at Intl market)


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3. corporate sector some 20 new garment factories opened in 2010 after

41 garment factories closed down in 2009 due to thecrisis. In the meantime 10 new footwear firmsestablished in 2010 (increased 38% over 2009). Butmost laid-off workers recovered in 2010 translatingthat the smaller closed factories, replaced with biggerones opened.

new investment approvals in 2010 increased by veryslightly (1% over 20009) with a better expectation forthis year.

but monthly registration of new firms in 2010

recorded solid recovery with 30% expansion over2009 corresponding an increase of bank credits toprivate sector by nearly 30%.

Credit to private sector (million riels)

Number of new firms registered at Ministry of Commerce(monthly registration)

Value of investment approvals (million USD)


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4. employment and wages

a large share of jobs lost in garment sectorduring 2009 crisis were regained in 2010 withcurrent total industrys workers of 320, 000.US$328 million worth of garment worker wagebill paid in 2010 (rose by 13%) compared withUS$290 paid in 2009 but still below pre crisislevel.

garment sector real wage rose by 15% in 2010,primarily resulted from the increase of industryminimum wage and lower inflation in 2010. The

industry average nominal wage is US$91 permonth in 2010.

real wage of garment workers actually hasntimproved much relative to the last decadestrong economic growth with per capita incomeexpanded by 6.7% per annum. This translates avery uneven distributional impacts of thegrowth.

job markets are recovering despite it remainslower the pre-crisis level. Real daily income ofvulnerable workers have also been improving,mainly unskilled workers, tricycle and motor-taxidrivers. Signaling prospect of poverty reductiongains (CDRI Nov. 2010 Survey)

Garments employment and wages

Real daily income of vulnerable workers (Nov 2000 riels)


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4. employment and wages, cont.

Indochina Research conducted a jobsentiment survey (the pulse of employees)in January 2011 of more than 30 types ofpositions in Cambodia, Laos and Vietnamrevealed that Cambodian employees aremore likely to change their currentemployer compared to those in Laos andVietnam.

Salary, as a job offering, is most importantin Vietnam and Laos while promotionopportunities are important in Cambodia.However, levels of satisfaction with salaryare much lower than stated importanceand most satisfaction is generally with theirwork and current work environment.

However, the majority of the workforce inthis region still stated that they intend tostay with their employers in 2011. Thissentiment is highest in Vietnam whereemployment stability plays an importantrole.

Source: Indochina Researchs I -TRAK, January 2011

Importance vs. Satisfaction(Survey of Indochina Research, January 2011)

Staff intention to stay with their current employers(Survey of Indochina Research, January 2011)


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5. inflation

Despite price hikes in other countries in theregion, Cambodia y-o-y consumer priceinflation dwindled to 3.1 percent in 2010 (from5.3 percent in 2009). Core inflation fell from4.5 percent to 1.0 percent over this period.The exchange rate remained relatively stable,appreciating about 3 percent against the USdollar, in the year ending 2010.

m-o-m inflation rate remains low withheadline inflation fell to -0.2% in Dec. 2010while food and core inflation fell to -1.4% and0.2% respectively over the indicated period.

this stability contrasts with the very numerousinflationary pressures (and limited policyinstruments): (i) global price increases of foodand oil; (ii) regional inflation; (iii) depreciationof the currency in real effective terms against

other garment exporters (although somerecent appreciation); and (iv) robust recoverywith increasingly rapid credit growth. Oneoffsetting factor is the good harvest leading tostable rice prices

Monthly consumer price index (yoy growth %)

Monthly consumer price index (mom growth %)


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5. monetary framework Bank liquidity surged, as deposits including financed

from remittances rose to a high of $4.3 billion by theyear ending 2010.

broad money pick-up (20%) was driven by credit toprivate sector which expanded by 27% in 2010 with aslight increase of loan-deposit-ratio (74% in 2010 from73% in 2009). Reserves gained momentum but interestrates remain high, averaged 16% of all banks.

the tripling of bank capital requirements came effectivein January 1, 2011 number of banks rose to 35 by theend of 2010 with total assets of US$6.4 billion and 8largest banks accounting for 75 percent these assets.

International reserves

Monetary framework (yoy growth %)

Interest rates (%)


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5. exchange rate

exchange rate appreciated 3% against the dollartrading at 4,053 riels (eop) per one USD.

Cambodias real effective exchange ratedepreciated against a basket of other garmentexporters for 14 straight months ending Dec2010

stability maintained through sterilization by theNational Bank of Cambodia (central bank): netpurchase of foreign exchange in 2010 wasUS$75 million

Cambodia exchange rate and differential with12 garment exporters

Exchange rate (index 100 = 2000 increase = appreciation)


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5. financial sector

banks liquidity has improved quickly in recentmonths reaching 41% of GDP by the end of2010 and total deposits at commercial banks

mounted , accounted for 37% of GDP in 2010(from 33% of GDP in 2009). Of the totaldeposits, 97% is in US Dollar currencyreflecting a very high dollarized financial system

the economy is effectively dollarized but limitingmonetary policy options with the role of thelocal currency has decline with time, with riel-

denominated deposits accounting for only3 percent. The growth rate of foreign currencydeposits in 2010 was doubled (24%) than thatof growth of reserves (12%).

high levels of collateral and conservativelending practiced in most banks. Credit toprivate in share of GDP remains low at 28%.

reported NPLs ratio improved in 2010, down toaround 2% from 4.8% in 2009.

with quickly rising number of banks in a limitedtechnical resource environment of the NBCcould constrain its oversight supervisioncapacity of the financial system.

Loans and deposits

Liquidities and reserves


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6. fiscal developmentsappropriate countercyclical fiscal policy and

sustainable debtfiscal deficit reduced to -5.7% of GDP in 2010 after

-8.1% in 2009. Improvement resulted fromunwinding expansionary policy especially in limitingunnecessary current spending and promotion.

adjustment in 2010 was on track, with increasedrevenues and lower domestic financing. Revenueprospect is anticipated to improve further for 2011.

Significant part of adjustment falling on capitalexpenditures. Priority sector funding also increasedto about 3.4% of GDP in 2010 (recurrent spending

only), compared to 3.2% in 2009 and 2.8% in2004-07, and are budgeted at 3.6% for 2011.

Fiscal framework (billion riels, annualized 3 months flows)

General Fiscal Operation 2005-2010Recorded trade flows (customs, annual, yoy growth)

2005 2006 2007 2008 2009 2010 pr.

Domestic Revenues 10.3 11.5 11.9 12.0 11.5 12.9Expenditures and net lending 12.8 14.2 14.7 14.8 19.6 18.6Current expenditure 7.9 8.5 8.7 9.0 11.2 11.3

Wages 3.2 3.3 3.0 3.2 4.6 4.3

Nonwages 4.1 4.6 5.0 5.1 5.9 6.3Provincial expenditures 0.5 0.6 0.6 0.8 0.7 0.7

Capital expenditure 4.9 5.8 6.1 5.8 8.4 7.3Domestically-Financed 1.2 1.3 1.2 1.5 2.3 2.2Externally-Financed 3.7 4.5 4.8 4.3 6.1 5.0

Overall balance (excl. grant) -2.5 -2.7 -2.9 -2.8 -8.1 -5.7Overall balance (incl. grant) -0.4 -0.2 -0.7 0.3 -4.0 -3.1

Financing 0.4 0.2 0.7 -0.3 4.0 3.1External 3.0 2.4 3.2 2.5 2.5 2.9Domestic -2.4 -2.0 -2.2 -2.5 1.8 0.5Debt Amortizations -0.1 -0.2 -0.3 -0.2 -0.3 -0.3

Sources: IMF, MEF-TOFE and Bank staff estim ates

(In percent of GDP)


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7. balance of payments

the widening of the current account deficit in2010 (-13.4 percent of GDP) resulted from abase effect, despite the rapid growth of exports.

As export growth continues to firm up, thecurrent account gap is projected to reduce to -12.4 percent of GDP in 2011.

net capital inflows increased in 2010 (aftersignificant outflows witnessed in 2009), financingthe external shortfall and resulting in a furtherincrease in foreign exchange reserves.

Net capital inflow gained ground in 2010,estimated to be some US$300 million after anearly US$700 million outflows in 2009.

foreign exchange reserves continued toincrease, to US$2.7 billion at the end of 2010,equivalent to approximately 4 months of imports.Reserves amounted to 56 percent relative to the

stock of broad money and 74 percent relative togross external debt.

Quarterly current account US$)

Financing of current account deficit (% GDP)


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8. policy response and challenges

policy responses challenges

essentially through fiscal policy:

2009 deficit was largest (8.1% of GDP) since recordavailable from 1990 with improvement in 2010 (to5.7% of GDP) and projected to remain the samescale for 2011.drawdown of domestic deposits for financing: 1.7%

of GDP in 2009 and 0.9% of GDP in 2010overall fiscal deficit and drawdown of domestic

deposits expected to dwindle in 2010

keeping fiscal policy on a sustainable path while

avoiding a premature withdrawal of fiscal stimulus.The countercyclical fiscal response was broadlyappropriate but raises issues of targeting andsustainable fiscal space.

developing domestic government bond markets

loosening of monetary policy in early 2009 throughdecrease in reserve requirements from 16% to 12%;tripling bank minimum capital requirement fromUS$12.3 million to US$37 million, effective January1, 2011.

a highly dollarized economic system. Any active useof monetary policy is hampered by lack of market-based instruments, weak interbank activity, and highlevel of dollarization (97% of total bank deposits)

rebound in credit growth to be monitored

strengthening regulatory framework and intensifiedbanking supervision to mitigate financial risks

Oversight supervision capacity of the central bank isoverstretched and faced monitoring efficiency in the

environment of rapidly rising number of banks.Government and the WBG launched risk sharing

facility scheme to help agribusinesses access tocredit by guaranteeing 50% (default) of commercialbanks lending to the sector. A good policy to addresscredit shortage in agribusiness sector and helpdiversify its narrow-based economy.

good policy but the interest rate remains highrelative to its neighboring countries and sector otherthan agribusiness may still face credit accessdifficulties.


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9. background data2008 2009 2010 2010Q2 2010Q3 2010Q4 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Note: 2010 value

GDP in US dollars 11,197 9,966 11,552GDP growth 6.7 -2.0 6.7 .. .. .. .. .. .. .. .. .. - Billion riel

Agriculture VA 5.7 4.7 4.6 .. .. .. .. .. .. .. .. .. 27% % GDP

Industry VA 4.0 -10.2 9.3 .. .. .. .. .. .. .. .. ..28% % GDP

Textiles VA 2.2 -16.0 14.0 .. .. .. .. .. .. .. .. .. 15% % GDPExports of garments 4.0 -18.9 24.4 24.2 26.5 35.9 20.3 32.6 46.7 43.0 20.8 .. 3,009 USD mill ionWorkers 1.5 -15.8 2.8 -1.9 8.6 13.2 11.2 11.7 12.2 14.0 13.3 .. 297,909 numberAverage pay 4.9 3.6 9.7 9.6 7.6 15.6 8.6 5.4 18.1 10.7 18.2 .. 91 $ / month

Construction VA 5.8 -8.0 1.0 .. .. .. .. .. .. .. .. .. 7% % GDPProject applications -27.0 -22.0 10.0 6.3 17.5 35.6 65.5 -7.3 -11.1 84.2 48.1 .. 406 projects apprArea under construction 4.5 -71.2 32.1 334.7 -39.7 367.9 82.8 -54.3 112.8 678.7 314.8 .. 1,556,881 sq metervalue 82.6 -67.8 26.6 287.6 -43.6 333.7 40.1 -47.8 102.7 616.1 263.7 .. 473 USD mill ion

Services VA 9.0 -1.2 6.1 .. .. .. .. .. .. .. .. .. 39% % GDPTourist arrivals 5.5 1.7 16.0 15.8 19.4 20.0 20.3 13.9 30.8 27.8 6.3 .. 2,508 visitors mill

by air .. -10.3 17.3 17.9 16.6 24.5 14.7 18.2 25.8 32.5 16.5 .. 1,304 visitors millby land / sea .. 18.5 14.7 13.8 22.3 15.0 26.8 10.0 36.8 22.3 -4.0 .. 1,204 visitors mill

HH consumption 12.2 1.4 .. .. .. .. .. .. .. .. .. .. #VALUE! % GDPGvnt consumption 5.0 45.9 .. .. .. .. .. .. .. .. .. .. #VALUE! % GDPInvestment 15.9 18.8 .. .. .. .. .. .. .. .. .. .. #VALUE! % GDPNet trade 19.3 -5.5 .. .. .. .. .. .. .. .. .. .. #VALUE! % GDP

Exports 15.7 -6.3 .. .. .. .. .. .. .. .. .. .. #VALUE! % GDPImports 22.6 -4.9 .. .. .. .. .. .. .. .. .. .. #VALUE! % GDP

Net foreign assets -3.6 41.7 13.9 30.7 21.9 13.9 25.3 21.9 22.2 14.1 13.9 .. 16,698 billion rielsNet claim on gvnt 64.5 -24.6 -5.6 -18.2 -13.9 -5.6 -18.6 -13.9 -8.3 -12.2 -5.6 .. -2,127 billion rielsCredit to private sector 55.0 6.5 26.6 17.1 23.2 26.6 23.1 23.2 24.8 24.5 26.6 .. 13,331 billion rielsCapital and reserves 34.0 25.7 19.5 23.4 24.2 19.5 22.8 24.2 22.9 16.8 19.5 .. -8,674 billion rielsLiquidity 4.8 36.8 20.0 31.8 26.7 20.0 29.5 26.7 25.7 23.2 20.0 .. 19,477 billion rielsMoney 16.9 30.0 3.2 15.6 10.4 3.2 12.8 10.4 6.5 7.6 3.2 .. 3,221 billion rielsQuasi-Money 2.2 38.6 24.0 35.7 30.4 24.0 33.5 30.4 30.0 26.7 24.0 .. 16,256 billion rielsGross foreign reserve (inc. gold) 33.9 9.4 12.1 14.6 9.7 12.1 8.7 9.7 10.5 7.1 12.1 .. 2,653 million USD

RatioReserves / foreign currency deposit 84.1 85.2 71.3 72.7 69.1 67.9 68.9 68.9 68.4 67.3 68.0 .. 92 %Credit to priv sector / broad money 73.1 72.8 65.6 64.3 66.0 66.9 66.1 66.1 65.8 66.3 68.4 .. 54Foreign cur deposits / total deposits 98.5 97.6 97.5 97.6 97.4 97.5 97.4 97.3 97.5 97.5 97.5 .. 98

CPIAll prices 25.0 -0.7 4.0 4.1 1.8 3.4 1.8 1.9 3.7 3.2 3.1 .. 138Food prices 34.4 -0.3 4.3 3.6 1.9 4.1 2.0 2.3 4.6 4.0 3.6 .. 154Core inflation 15.9 5.0 1.7 2.1 -0.3 1.0 -0.4 0.0 0.9 1.0 1.0 .. 115

International pricesCrude oil, avg, spot 36.4 -36.3 28.0 32.1 10.7 13.1 5.9 11.4 10.3 9.0 20.2 20.2 948 $/bRice, Thai, A1.Special 77.1 -32.3 17.6 2.3 21.7 22.2 20.8 35.9 43.5 26.9 2.6 -3.6 4,604 $/mtRubber, Singapore 14.3 -25.7 90.2 124.0 69.3 68.7 61.1 62.7 66.9 69.6 69.4 78.5 4,385 c/kg

year-on-year growth (exc ept when otherwise indicated)

MONETARY AND PRICES

NATIONAL ACCOUNTS AND REAL SECTOR


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9. background data, cont.2008 2009 2010 2010Q2 2010Q3 2010Q4 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Note: 2010 value

Domestic revenues 31.6 -6.9 .. 7.1 20.5 .. 12.0 20.8 -3.0 33.9 .. .. .. Riels bil lionTax revenues 30.4 -6.0 .. 4.3 22.5 .. 20.0 21.0 -7.2 8.7 .. .. .. Riels bil lionNon tax revenues 27.6 -6.0 .. 25.4 13.1 .. -21.0 30.0 20.5 104.7 .. .. .. Riels bil lion

Total expenditures 28.6 32.8 .. 0.5 9.5 .. 2.3 54.1 -27.8 2.3 .. .. .. Riels bil lion

Current expenditures 31.3 25.9 .. 11.5 16.5 .. 7.1 59.7 -34.4 46.9 .. .. .. Riels bil lionWages 35.9 43.1 .. 9.1 6.9 .. 19.3 22.5 -47.8 52.5 .. .. .. Riels bil lionNon wages 28.7 15.4 .. 13.8 23.2 .. -2.7 97.2 -16.8 43.3 .. .. .. Riels bil lion

Capital expenditures 25.0 42.7 .. -11.0 0.3 .. -3.7 48.3 -16.8 -44.8 .. .. .. Riels bil lionCapex - dom. Fin. 61.2 45.8 .. -8.3 31.3 .. 40.9 58.4 13.2 -98.4 .. .. .. Riels bil lionCapex - ext. Fin 15.5 41.5 .. -11.8 -14.0 .. -29.7 45.0 -31.5 -36.0 .. .. .. Riels bil lion

Current deficit 25.5 -20.9 .. -61.2 -97.8 .. -1,054.2 304.4 411.2 5.8 .. .. .. Riels bil lionOverall deficit 17.9 196.3 .. -6.8 -12.9 .. -20.6 57.9 -84.4 -148.3 .. .. .. Riels bil lionFinancing 17.9 196.3 .. -6.8 -12.9 .. -20.6 57.9 -84.4 -148.3 .. .. .. Riels bil lion

Foreign financing 33.9 17.2 .. -9.9 -13.2 .. -43.9 61.6 -30.9 -40.0 .. .. .. Riels bil lionDomestic financing 45.3 -158.6 .. 10.1 -33.1 .. -19.7 6.8 -193.9 48.1 .. .. .. Riels bil lionOutstanding operations 1.1 -119.4 .. 26.1 -144.5 .. -85.9 -305.5 -30.9 -2,377.1 .. .. .. Riels bil lion

% GDP

Domestic revenues 15.1 10.8 .. 11.9 12.7 ..Total expenditures 18.3 18.7 .. 18.6 22.0 ..

Current expenditures 10.8 10.4 .. 10.5 13.4 ..Capital expenditures 7.6 8.3 .. 8.1 8.7 ..

Current deficit 3.9 2.4 .. 0.3 (0.0) ..Overall deficit (3.5) (7.9) .. (7.7) (8.6) ..

Foreign financing 6.9 6.2 .. 5.9 5.3 ..Domestic financing (3.9) 1.8 .. 2.4 3.0 ..

Six Priority ministries .. 4.4 .. 4.5 7.7 ..ditto - recurrent budget .. 3.1 .. 3.8 5.0 ..

Six priority ministries as % spending .. 23.7 .. 23.9 34.8 ..in recurrent .. 30.1 .. 36.0 37.2 ..

Exchange rateRiel per USD 4,071 4,160 4,202 4,230 4,257 4,131 4,259 4,251 4,240 4,094 4,060 .. 4,061 Riel per USDReal effective exchange rate 17.1 0.2 -0.3 -0.6 -1.2 1.9 -1.6 -1.1 -0.5 2.7 3.4 .. 127.2 ex 100=2000

Ditto for 12 competitors 2.6 0.6 4.7 5.8 5.1 3.8 5.2 4.5 2.5 4.4 4.5 .. 113.4 ex 100=2000

Balance of payments (% of GDP)Balance of trade of goods -12.3 -18.3 -14.1 -17.8 -19.4Balance of trade of services 5.3 5.9 5.3 4.4 5.5

Current account (w/o official transfers) -7.1 -12.8 -10.4 -15.7 -17.3Current account (w official transfers) -3.1 -7.9 -5.3 -9.2 -10.3

ODA 5.7 7.2 6.5 11.7 8.0FDI 4.8 9.5 3.9 5.7 6.3Other private -2.5 1.6 -0.6 -0.3 -1.8

Overall balance 3.4 3.5 0.0 -0.1 -1.2

year-on-year growth (except when otherwise indicated)FISCAL

EXTERNAL

KH Econ Monitor Feb2011

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