Speaking at a conference organised by ANZ Royal at Raffles Hotel Le Royal on Friday, Glenn Maguire, ANZ’s Chief Economist for South and Southeast Asia, said that Cambodia is in a buoyant position from an economic standpoint, as the country is “bucking” the regional trend of slower growth.
According to the economist, Cambodia will likely achieve GDP growth of 7.2 percent in 2016 and 7.1 percent in 2017.
However, he acknowledged that productivity is not keeping pace with climbing wages.
“If salaries continue to grow or tip up at a relatively low level then it is going to outpace productivity, which is basically an economist’s way of saying you need to move up the value added chain and produce higher-value-added goods at a faster pace to allow your salaries to grow if you want productivity in the economy to increase,” he said.
Maguire also said the current Asian trade recession can no longer be attributed to cyclical factors, but it is rather the result of structural elements at play, as globalisation may represent a structural overhang to merchandise trade as a percentage of GDP.
“The level of global and regional trade has peaked,” he said during his presentation.
Leonie Lethbridge, CEO of ANZ Royal Cambodia, also addressed the conference and said that the country needs to implement reforms into skills training and education to sustain growth.