The global epidemiological and economiccrisis unleashed by COVID-19 (Coronavirus) poses thegreatest threat to Cambodia’s development in its 30 years ofmodern history. The three most affected sectors - tourism,manufacturing exports, and construction - contributed morethan 70 percent of growth and 39.4 percent of total paidemployment in 2019. Therefore, in the current year,Cambodia’s economy is likely to register its slowest growthsince 1994, contracting between -1 percent (baseline) and-2.9 percent (downside). Poverty can increase between 3 and11 percentage points from a 50 percent income loss thatlasts for six months for households engaged in tourism,wholesale and retail trade, garment, construction, ormanufacturing. The fiscal deficit can reach its highestlevel in 22 years, and public debt is expected rise to 35percent of gross domestic product (GDP) by 2022. Theauthorities have introduced emergency measures to containthe outbreak and provide fiscal assistance to affectedhouseholds, workers, and enterprises. To facilitate a robustrecovery, the government will need to continue to ensuremacroeconomic and financial sector stability and acceleratetrade and investment reforms as well as encourage fasteradoption of digital technologies.
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