Kingdom inflation rises on oil prices

A woman purchases pork at an open-air market in Meanchey district, on the outskirts of Phnom Penh. (Will Baxter/Phnom Penh Post)

Monday, 27 February 2012
May Kunmakara
The Phnom Penh Post

Inflation in Cambodia rose 5.8 per cent year-on-year in January, according to figures from the National Institute of Statistics.

Rising fuel costs had spurred the inflation, which was felt largely in the price of food, officials said.

Data showed food and non-alcoholic beverage prices in January increased by 7.7 per cent compared to a year earlier.

The price of some items, such as beef and port wine, increased by as much as 17.5 and 20.3 per cent respectively, and the cost of vegetables rose nearly 10 per cent.

Cambodia raises inflation forecast to 5.5 pct in 2011

PHNOM PENH, July 18 (Xinhua) -- Cambodia raised inflation rate forecast to 5.5 percent this year, up from its earlier prediction of maximum 5 percent, said the Minister of Finance Keat Chhon (pictured) on Monday.

"As the globe is challenging with high unemployment rates and high inflation rates, Cambodia, a small country with open economy, is obviously unable to escape from these impacts," he said during a meeting with the members of parliament on budget draft for 2012' s expenditure.

"We hope that the rate will decline to 5 percent in 2012," he said.

Cambodia's inflation rate jumps to 6.5% in May

July 06, 2011
Xinhua

Cambodia's inflation rate has gradually reached 6.5 percent in May, up from 5.1 percent in April, according to the latest statistics released from the National Institute of Statistics (NIS) on Tuesday.

The inflation rate of 6.5 percent in May this year because the prices of food non-alcoholic beverages climbed 8 percent, prices for oil and fats increased by 10 percent, meats rose by 12 percent, pork by 15 percent, beef by 9 percent, chicken by 8 percent, seafood by 11 percent, and vegetables by 12 percent, said the report.

The report noticed that the prices of gasoline increased the highest of up to 15 percent.

Cambodia's inflation in first 9 months stands 4.21 pct

PHNOM PENH, Oct. 27, 2010 (Xinhua) -- The Consumer Price Index (CPI) in Cambodia stood at 4.21 percent in first nine months of this year compared to the same period last year, according to the statistics released by the National Institute of Statistics on Wednesday.

"The main increase for all index group to 4.21 percent of inflation from January to September, 2010, was due to the group of food and non-alcoholic beverages which rose 4 percent as rice and meat were up 2.6 percent, vegetables grew by 6.5 percent, electricity, gas and other fuels were up 7.6 percent, gasoline was up 25 percent, and transport went up 8.1 percent," the report recorded.

The report showed that the inflation rose 1.4 percent on quarter-on-quarter comparison.

In recent weeks, the Asian Development Bank, International Monetary Fund and World Bank have forecast Cambodia's inflation at 4 percent, 4.5 percent and 5 percent respectively.

Riel value slumps to new low

Tuesday, 18 May 2010
Nguon Sovan
The Phnom Penh Post

Exchange rate falls to 4,235 riels per dollar amid gradual depreciation in 2010

THE value of the riel reached a year low on Monday potentially pushing up inflation and affecting Cambodians’ purchasing power, commentators said.

The riel currency has lost 1.07 percent of its value against the US dollar within the past month, according to rates recorded by Ly Hour Exchange.

On Monday, one US dollar was worth 4,235 riels, up from 4,190 riels per dollar at this time last month.

“We have seen that the riel has gradually depreciated in value against US dollar during the last month,” said Sieng Lim, the owner of Cambodia’s Ly Hour Exchange, on Monday.

“Normally, when riel notes are abundant on the markets, its value is depreciated,” she added.

The rate, estimates for which can vary among agencies, has sparked concern among some members of the Kingdom’s business community.

Chan Sophal, president of Cambodia Economic Association, said that, theoretically, the riel depreciation could be due to a decline in the inflow of US dollars to Cambodia. He could not comment further on why the riel has lost value.

The depreciation, he said, would affect purchasing power and pushes up inflation as the price of goods increases.

“People with wages in riel currency would suffer the most from the depreciation,” he said.

He pointed out that the garment industry, which carries out transactions in US dollars, would not suffer and added that as the circulation of riel in Cambodia is relatively small, it would be easy for the government to raise its value.

“It’s not difficult to stabilise the riel because it constitutes 10 percent of total money supply,” he said.

Generally, the National Bank of Cambodia (NBC) intervenes when the riel depreciates, by selling US dollars to buy riels when the exchange rate reaches 4,200.

In August last year, it announced it would dip into its foreign reserves to buy $6 million worth of Cambodian riels to hold up the value of the local currency, which had reached 4,191 against the greenback.

But since the start of this year, Cambodia has not seen any NBC intervention against depreciation.

Tal Nay Im, NBC’s director general, did not pick up the phone after repeated calls on Monday.

Some analysts believe the depreciation may be a blip. Cheam Teang, Executive Vice President Chief of Treasury and International Cooperation Officer at ACLEDA Bank, said Monday that it is seasonal trend. He said he believes that, as the depreciation is small, it will not have much of an impact on the economy.

“In my own observations, at this time of the year riel currency is always depreciated, and it would recover the value in the last quarter of the year.

The depreciation is just around 1 percent – it’s normal, and it’s no surprise” he said.

“But it fuels some rise in inflation too,” he warned.

The Kingdom’s consumer price index, recorded by the National Institute of Statistics, saw inflation rise to 7 percent in March.

High oil prices fuel inflation in Cambodia

PHNOM PENH, May 3, 2010 (Xinhua) -- Inflation reached almost 7 percent in March as petrol prices in Cambodia rocketed up 38.5 percent over last 12 months, local media reported on Monday, citing new statistics.

The Phnom Penh Post quoted the monthly Consumer Price Index ( CPI), released by the National Institute of Statistics on Saturday, as saying that inflation stood at 6.7 percent in March this year, compared with a year earlier.

Although this is lower than the 7.3 percent annualized inflation seen in February, the report states that the month-on- month rate increased to 0.7 percent in March from 0.2 percent in February.

"The main increase ... was due to food and non-alcoholic beverages; alcoholic beverages and tobacco; clothing and footwear; water; electricity, gas and other fuels; healthcare costs; and transport," concluded the report.

It noted that fuel price hikes were a significant inflationary factor. Petrol prices have risen by 38.5 percent since March 2009, and 5 percent month on month.

Diesel is up 33.9 percent since March 2009 and prices for fuel and oil for personal transport have risen by 37.8 percent.

On Sunday, premium and regular petrol at petrol stations in Phnom Penh were selling at 4,650 riel (1.1 U.S. dollar) per liter and 4,400 riels a liter respectively.

Sok Chheang, executive director of Cambodia Trucking Association, which represents 16 large transport companies, said Sunday that profits in his sector have declined as international oil prices have soared.

Commentators believe that the latest CPI reflects that international oil prices have had a knock-on effect on the cost of consumer goods.

Even Aid Could Be Hurt in Crisis: Official

By Sok Khemara, VOA Khmer
Original report from Washington
13 October 2008

Click here to listen to the Khmer audio aired on 11 October 2008
Click here to listen to the Khmer audio aired on 12 October 2008

Financial woes spreading from the US and across developed countries could lead to decreased future investment—and aid—in Cambodia, a top economic official said Friday.

Aun Porn Moniroth, secretary of state for the Ministry of Economy and Finance and an adviser to Prime Minister Hun Sen, led a delegation to Washington over the weekend, as the World Bank and International Monetary Fund held meetings amid spreading economic worries in the US, Europe and Asia.

Aun Porn Moniroth said he planned to "to draw attention to our main development partners, who give significant donations to developing countries."

All countries "worry," he said, "and are spending much money to stabilize their individual economies," he said, which could lead to a decrease in aid.

Cambodia receives around $600 million a year in aid from international donors to help its development, but that money could be affected, as well as investment, as the global economy slows down.

While the main focus of the weekend meetings was the global economy, Aun Porn Moniroth said Cambodia's goals of poverty reduction and improvement of the health and education sectors remained a priority.

Independent economist Kang Chandararot, director of the Cambodia Institute of Development Study, said a sweeping crisis may still not hit Cambodia too hard.

Aid to Cambodia was minimal, he said, and not likely to stop.

"Up to $1 billion or more, it's a sum that countries can cooperate on or take partnerships in helping Cambodia," he said.

Outside of aid money, Cambodia's main earners are tourism, construction, agriculture and garment export. Experts worry a sustained financial crisis could hurt there, too, though exactly how is not certain.

Export markets like the US, hurt by a shrinking economy, a debt crisis among lending institutions and wobbly markets, could affect Cambodia through lowered demand for produced goods, Aun Porn Moniroth said.

Cambodia's garment sector employs up to 350,000 workers, and the government will have to take active measures to attract investors and coordinate incentives, Kang Chandararot said.

A "large-scale development plan" nationwide and especially the promotion of special economic zones attractive to investors will be needed, he said.

Meanwhile, outside investment will be hard to maintain at the same level, and microfinance institutions may have a harder time supporting borrowers, he said.

Aun Porn Moniroth said the government has a strategy to strengthen its own financial systems in the long term.

"The main goals of our strategy are to first strengthen the banking system and strengthen and continue to develop some of the other sectors…such as insurance, stocks, and so on," he said. "But we are precautious now with the development of the stock market, for instance, as we are seeing this crisis around us in the world."

Meanwhile, Cambodia hopes to maintain an economic growth rate of 7 percent, he said, even as Cambodians are being hit with rising inflation, food and fuel prices.

Poor To Receive Emergency Aid Package

By Chun Sakada, VOA Khmer
Original report from Phnom Penh
08 October 2008

The Asian Development Bank assistance would provide free rice to certain families living in poverty, as well as seeds and fertilizer to farmers.

The Asia Development Bank said Wednesday it would provide $35 million in emergency food aid to counter rising food and fuel prices gripping the country.

The aid would go to families living in seven provinces around the Tonle Sap lake and in the slums of Phnom Penh, the ADB said in a statement.

Half the aid package would be a grant and the other half would be a loan, with the government putting $5 million into the projects, the ADB said.

"There will be funding for food distribution and food for work, and capacity-building for emergency response to the food crisis," Arjun Goswami, ADB's Cambodia director, told reporters Wednesday.

Poor families will be offered free rice and other food subsidies, while schoolchildren will receive food as well. The aid will also be used to foster employment through "food-for-work programs" as well as donations of seed and fertilizer.

"The project will prepare the system to respond to a food crisis," said Vong Sandap, secretary-general of the Ministry of Economy and Finance and director of Cambodia's emergency food assistance project.

A typical Cambodian household spends 60 percent of its income on food, the ADB said, adding that many impoverished families "are selling their household assets and taking out high interest loans in order to purchase food, fueling a downward spiral of poverty."

Cambodia's poorest families to receive emergency food assistance

MANILA, Oct. 8 (PNA) — The Asian Development Bank (ADB) will provide Cambodia’s poorest families with US$ 35 million in emergency food assistance as they struggle to cope with rising food and fuel prices.

Poor families living around the Tonle Sap Lake, and in Phnom Penh’s urban slums, will receive free rice and other food subsidies. Food will also be provided to poor children attending early childhood learning centers and primary schools.

ADB assistance will foster employment through food-for-work programs, and impoverished farmers will receive seed and fertilizer to boost crop yields.

“ADB’s assistance will help half a million of Cambodia’s poorest people stave off hunger,” said Arjun Goswami, ADB’s Country Director in Cambodia.

Over the past year rice prices in Cambodia have doubled, the price of meat and fish has risen 30 to 50 percent, and farmers have been hit hard by a doubling of fertilizer prices.

Many impoverished families are selling their household assets and taking out high interest loans in order to purchase food, fueling a downward spiral of poverty.

“Cambodian households normally spend 60 percent of their income on food, so rising food prices have had an absolutely devastating effect on the country’s poorest families,” said Mr. Goswami.

One in every three children in Cambodia are undernourished, and the current food crisis is increasing the severity and scope of the country’s child malnutrition problem.

“ADB’s assistance is particularly focused on protecting Cambodia’s children from the ravages of malnutrition, which can impair their physical and mental development and cause a range of health ailments,” said Mr. Goswami.

ADB’s emergency food aid package consists of a US$ 17.5 million grant and an additional US$ 17.5 million loan being provided at concessional rates. The Government of Cambodia will provide a further US$ 5.08 million for the project.

Broadcasters interested in obtaining video interview footage of ADB’s Country Director in Cambodia, Arjun Goswami, along with B-Roll footage, please contact Multimedia Team Leader Jason Rush: jrush@adb.org, mob: +63-920-938-6490. High quality jpeg photos are also available.

Famine in Cambodia: $40 million funding provided

08 Oct 2008
By Ky Soklim
Cambodge Soir Hebdo
Translated from French by Luc Sâr
Click here to read to article in French

Almost half a million of Cambodians are threatened by malnutrition in the provinces bordering the Tonle Sap and Phnom Penh.

On Wednesday, it was learnt that the Asian Development Bank (ADB) will provide $35 million and the Cambodian government will fund $5 million in aid to the people affected by the crisis.

The 500,000 beneficiaries of this aid live mainly in the provinces bordering the Tonle Sap (Banteay Meanchey, Battambang, Pursat, Siem Reap, Kampong Thom and Kampong Chhnang, Oddor Meanchey) and in poor quarters of Phnom Penh.

The famine is cause by a sharp increase in the price of basic foodstuff: the price of husked rice has doubled, those of meat and fish climb by 30 to 50%. The food situation for farmers is also precarious due to the tripling of the price of fertilizer.

“Cambodian families spend about 60% of their income on food,” said Arjun Goswami, the ADB director in Cambodia, during a press conference held on Wednesday 08 October.

Schoolchildren are the most vulnerable. One Cambodian child in 3 is already affected by malnutrition. “The ADB must protect these children, because malnutrition can affect their bodily and mental growth,” Arjun Goswami announced while adding that the actual needs in the Tonle Sap area to face this crisis would cost about $80 million.

35% of the entire 13.4 million Cambodian population live under the poverty limit.

Investors expect continued growth following CPP win

Prime Minister Hun Sen waves to the people from a campaign poster in front of the Naga Casino in Phnom Penh. (Photo: AFP)

Monday, 11 August 2008
Written by Kay Kimsong and George McLeod
The Phnom Penh Post

Political stability makes investors and business leaders happy, but opposition predicts corruption and poverty will only worsen

WITH the Cambodian People's Party having a solid majority to form the next government, some investors say they expect stability and strong growth in the coming mandate.

"A government led by the same leader is a government with more experience in business and trade. I hope there will not be much change," said Chan Sophal, director of the Cambodian Economic Association.

"The general view is that the political situation is more stable than five to ten years ago," agreed Acleda Bank director Peter Kooi. "Our customers want stability. They are saying if there is stability we will invest our money."

But Kooi urged the incoming government to focus on creating employment.

"There are three things the government should be focusing on - jobs, jobs and jobs....Less than 10 percent of university graduates are finding jobs," he said.

However, opposition lawmaker Yim Sovann said the ruling party has failed to deliver on promises to fight corruption and poverty, and that this would impact the economy.

"I think the government being ruled by the CPP alone will be worse than the previous one," he said.

"The CPP has ruled Cambodia for more than 20 years already, but poverty remains high, [as well as] corruption, inflation, land grabbing, illegal logging and illegal immigration."

CPP lawmaker Cheam Yeap, however, said the new government would pass at least 20 laws, including anti-corruption legislation and a new criminal code, in the upcoming National Assembly session.

"I am sure foreign investors will see Cambodia as an attractive investment location," he told the Post.

The election in 2003 ended in a yearlong stalemate that saw opposition parties refusing to form a coalition with the CPP, causing uncertainty in the marketplace.

With a 2007 constitutional amendment allowing a party to form a government with a simple 50-percent-plus-one of the seats in the National Assembly, the CPP is now in a strong position to govern alone once official results are announced to confirm its majority.

Inflation Emerges as Campaign Issue

By Ros Sothea, VOA Khmer
Original report from Phnom Penh
23 April 2008

Food prices have increased dramatically in recent months, jumping 24 percent last month. Now, many people are looking to political parties for answers.

[Editor's note: In the weeks leading into national polls, VOA Khmer will explore a wide number of election issues. The "Election Issues 2008" series will air stories on Tuesday and Wednesday, followed by a related "Hello VOA" guest on Thursday. This is the second in a two-part series examining inflation.]

The soaring price of food and other essentials has by now affected most Cambodians, especially those living under a dollar a day. The country’s inflation has people vexed, making them reluctant to vote because the cost of travel is too high.

But fighting inflation has emerged as one of the first real platforms carried by political parties. Elections past have seen such issues as border demarcation or illegal immigration—vague problems that are emotional touchstones with the populace.

Political parties vying for parliamentary seats in July’s general polls see this as a time to act and are making inflation a main point of attack, with the electoral campaign period set for June 26 to July 26.

“The soaring food price is one of my main political platforms,” said Funcinpec Secretary-General Nhiek Bun Chhay. “With this strategy, I believe we will receive a lot of support.”

To fight inflation, he said, Funcinpec will create a true free market to open competition between companies to import fuel at lower costs.

Keo Remy, vice president of the Human Rights Party, called the curbing of inflation his party’s top priority.

“We will control riel currency, reduce taxes on essential imported products and encourage farmers to produce domestic products,” he said.

Opposition leader Sam Rainsy said his party’s strategy would mainly focus on fighting corruption, to prevent food prices from climbing.

Khieu Kanharith, a government spokesman and member of the ruling Cambodian People’s Party, said the rising cost of food and other commodities was a product of the free market, and not something the government can reduce.

The CPP hopes to promote salary increases for workers and civil servants as a way to temper the impact of inflation, he said.

Food prices have increased dramatically in recent months, jumping 24 percent last month. Now, many people are looking to political parties for answers.

Koul Panha, director of the Committee for Free and Fair Elections, a monitoring group, said political parties must remember the promises they make on the campaign trail, and keep them once they’ve won.