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SSoocciioo--EEccoonnoommiicc TTrreennddss

SSeepptteemmbbeerr –– OOccttoobbeerr 22001177

Contents

Page

Executive summary 2

1. Cambodia economic trends 5

1.1. Consumer price index 5

1.2. Finance 6

1.3. Trade 8

1.4. Budget execution 9

1.5. Private investment 10

1.6. Tourism 10

1.7 Construction 11

2. International commodity prices 11

2.1. Crude oil price: Brent, WTI, Dubai 11

2.2. Rice price: 5%, 25%, 100% broken 12

2.3. Rubber price: TSR20, SGP/MYS 12

3. Appendix 14

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Executive summary

1. In September 2017, Phnom Penh Consumer Price Index increased by 0.3% month-on-month

and increased 2.7% year-on-year. In September, price levels of product groups that increased

remarkably include foods and non-alcoholic beverages, clothing and footwear,

communication and miscellaneous goods and services, but the price level of recreation and

culture fell 0.4%. Compared to one year before, price levels of transport and restaurant

increased 4.4% and 7.8%.

As per estimation till the end of December 2017, the inflation rate year-on-year is

approximately 1.9% and year average inflation rate is approximately 2.9%.

2. Money supply: broad money M2 reached KHR 69,742 Billion as of September 2017, with an

average growth 2.1% per month during first nine months this year (average growth was 1.4%

per month in 2016), in which foreign currency deposit was KHR 58,263 Billion, with average

growth of 2.2%. Dollarization has certain advantages to the economy, such as maintaining low

inflation, exchange rate stability, attractiveness to foreign investment and promoting trade to

the world. The disadvantages include ineffectiveness of monetary policy, loss of seigniorage

and national banknote as a pride symbol of the country.

Credit and interest rates: As of September 2017, total credit granted by commercial banks

amounted to KHR 64,961 billion, increased by 1.5% per month in average duing first nine

months of the year, at about the same pace of growth in 2016. Despite high credit growth in

recent years, NPL ratio remained stable at approximately the same level as in other countries

in the region. As of 2016, NPL ratio in Cambodia was 2.4%, Vietnam 2.5%, Thailand 2.8%, and

the Phillipines 1.9%. As of September 2017, lending interest rates of commercial banks in

Khmer Riel and US Dollar were 14.53% and 11.79%, slightly decreased gradually frome the

beginning of the year. After issuance of Prakas on Public Offering of Debt Securities by SECC,

the NBC issued Prakas on requirement conditions for banking and financial institutions for

securities issuance application, which would help promoting direct financing from the public

and other investors with more diversified instruments of higher liquidity and lower interest

rates. The required conditions include having net worth of at least KHR 60 billion, full

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compliance of prudential provision requirements, and good financial position and good

governance with secured level rating by the NBC in the last two years, and the approval of the

national bank. The requirement would also help strengthening public confidence on financial

industry securities.

3. Trade: In first nine months of this year, total import reached US$ 10,191 million, increased by

11.3% compared to the same period last year, in which textile import increased by 6.3%,

construction equipment import increased by 12.7%, whereas fuel import decreased by 29.7%.

At the same time, total export reached US$ 8,261 million increased by 6.9% compared to the

same period last year, in which garment and footwear export increased by 5.8% and natural

rubber export increased by 73.8% (increased by 25.6% in quantity).

4. In first nine months of 2017, domestic revenue of national administration totalled to KHR

12,278 billion (3.5% higher than annual budget), increased by 13.7% over the same period

last year, in which tax revenue was KHR 10,818 billion, increased by 14.2%. National level

administration executed expenditure of KHR 11,367 billion (16.8% lower than annual budget),

increased by 8.1% over the same period last year. In first nine months of this year, the current

account accumulated surplus of KHR 3,805 billion, with budget surplus of KHR 792 billion.

5. In ten months of 2017, Council for Development of Cambodia had approved 122 investment

projects, with total investment of US$ 4,843 million, increased 75.1% over the same period

last year. The investment growth is mainly in agriculture, service and tourism sectors.

6. In September 2017, number of international arrivals was 376 thousands, decreased 11.9%

month-on-month, but increased 8.9% compared to the same month last year. Number of

international arrivals fluctuates seasonally, with small fluctuation from April to September

due to climate condition, and high growth from October to February of subsequent year.

During nine months of 2017, total number of international arrivals reached 3,913 thousands,

up 11.5% over the same period last year.

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7. In first ten months of 2017, number of construction proposals totalled to 2,816 projects,

increased 626 projects compared to the same period last year, with construction value of

US$ 6,268 million, up 27.7%, and total construction area of 10.36 million square meters,

down 2.1%.

8. Oil price: crude oil price continued to increase in October 2017, the price of one month crude

oil Brent was US$ 57.6 per barrel and WTI was US$ 51.6 per barrel. Global economic growth is

estimated at 3.7% for the year 2017 and 3.7% for the year 2018 (up revised from estimation

in previous month of 3.6% and 3.5%). According to OPEC monthly oil market report, world oil

production in October was 96.71mb/d, up 0.53 mb/d month-on-month, in which the supply

by OPEC countries was 32.59 mb/d and non-OPEC countries was 64.12 mb/d. Global oil

demand for 2017 is estimated at 96.9 mb/d, revised up slightly due to better-than-expected

performance of China in the third quarter of 2017, and world oil demand for 2018 is expected

to reach 98.5 mb/d. Global supply is below demand in the second and third quarters this year,

and that gap widened in third quarter. During nine months of 2017, Cambodia imported 405

thousand tonnes of gasoline and 955 thousand tonnes of diesel, an increase of 10.3% and

2.6% over the same period last year.

Rice price, as of October 2017: (1) Cambodian export rice price (5% broken) was US$ 435 per

ton, unchanged from previous month. In first nine months this year, Cambodia has exported

385 thousand tons of rice, up 9.0% over the same period last year. (2) Thai export rice price

(5% broken) US$ 394 per ton, declined US$ 8 per ton month-on-month. The price decline was

due to reduced demand from foreign buyers, reportedly waiting for new rice supplies to

enter the market. At the end of the month, early harvest in some areas was affected by

flooding. (3) Vietnamese export rice price (5% broken) was US$ 376 per ton, decreased by

US$ 6 per ton month-on-month. The price of Vietnamese and Thai rice decreased in October,

while price of the US’s export rice continued to increase. Global supply of rice for the year

2017/18 is estimated at 481.2 million tons (5.9 million tons less than previous year), and the

global rice stock for the year 2017/18 is estimated to reach 138.9 million tons, the highest

since 2000/01. Volume of global rice trade in 2017 is estimated at 44.6 million tons, increased

by 11% compared to last year, with import growth of Bangladesh, China, Iran, Madagascar,

Nigeria, the Philippines, Saudi Arabia and Sri Lanka.

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Rubber price: natural rubber price delined remarkably in October 2017, despite the increase

of crude oil price. In October, natural rubber production increased in China, and some other

rubber producing countries in South-East Asia are in high production season. According to

ANRPC, during first ten months of 2017, world's natural rubber production was 10.43 million

tons, up 5.0% from the same period last year, and world’s natural rubber consumption was

10.73 million tons, up 1.1%.

(For details of the report, please contact Statistics Department of General Department of

Economic and Public Finance Policy, Ministry of Economy and Finance.)

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3. Appendix

Leading Indicators

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Inflation, M2 and Foreign Reserve

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Exchange Rate

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Banking and Securities Market

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Budget Execution 2016 and 2017 (BnR)

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Investment and Employment

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Trades

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********* Prepared by Statistics Department

General Department of Economic and Public Finance Policy

Ministry of Economy and Finance

Contacts:

Desk Number: 023 427 913; H/P: 077 703436

Working Hours: 7:00 AM - 11:00 AM, and 14:00 PM - 17:00 PM