The Covid-19 outbreak has had a devastating effect on the global economy, but Cambodia has managed to maintain good economic stability and the banking system remains strong and solvent to support economic activity, according to a report.
In 2021, banking system assets and deposits grew by 18% and 17.7%, respectively, and loans grew by 23.5%, the National Bank of Cambodia (NBC) said in its latest report.
The bank’s deputy governor and chief executive, Chea Serey, told a “Financial Stability Review 2021” workshop that domestic and global economic activity in 2021 continued to recover despite the emerging new variants of Covid-19 and rising infection rates.
“For Cambodia, the favorable situation in the global economy, combined with the success of the national vaccination campaigns against Covid-19, has stimulated the recovery with a growth rate of 3% in 2021 after a drop to -3.1. % in 2020.
This growth was mainly supported by growth in exports of clothing, agricultural products and non-clothing products, as well as wholesale and retail trade, but the tourism sector contracted as international tourism fell by 84% in 2021.
The banking system remained solid and continued to provide the financing needed to support economic activities. In 2021, banking system assets and deposits grew by 18% and 17.7% respectively, with credit showing growth of 23.5%,” she said.
“Yet asset quality remained sound and liquidity levels well above regulatory requirements. At the same time, banks and MFIs continued to comfortably meet the BNC’s capital adequacy criterion. Also, in line with BNC policy, banks and MFIs have been able to restructure loans worth KHR 20 trillion to 310,7746 accounts since the Covid-19 outbreak,” she said. underline.
The non-banking financial sector also continued its gradual expansion. The Cambodian stock market welcomed for the first time since the platform’s inception in 2015 a company’s listing on the new CSX Growth Council for SMEs. At the same time, the capitalization of the Cambodian bond market reached KHR542.4 billion, with financial institutions accounting for 70% of the share. .
According to the Financial Stability Review 2022, the pandemic is not yet over and the risks of more virulent and transmissible variants remain.
The Russian-Ukrainian conflict and the recurring blockages in China are also weighing on global growth. Inflation, which was already high amid supply-demand imbalances triggered by the pandemic, rose further, he said.