National Bank of Cambodia (NBC) assistant governor Chea Serey on February 7 proposed that British businesspeople ramp up their investments in Cambodia and buy more local goods, to strengthen bilateral economic relations and stimulate recovery in the Southeast Asian country following a downturn linked to Covid-19 and the Ukraine crisis.

Serey made the request at a meeting with newly-appointed British ambassador to Cambodia, Dominic Williams, at the NBC, according to a statement issued by the central bank later that day.

The senior central bank official recapped that Cambodia “reopened” in 2021, setting the stage for the comeback of economic activity, against the backdrop of steady recovery undergirded by adequate vaccination rates and effective Covid-19 management, the statement noted.

By end-2022, the elevated year-on-year inflation rate settled to a modest three per cent, following a year of rising prices for food, fuel and other commodities associated with the Russo-Ukrainian conflict, she said.

Economic diversification efforts and overall increases in production and exports were also considerable contributors to growth last year, as domestic tourism returned more or less to normalcy, while the number of international arrivals exceeded expectations, although it did fall far short of pre-Covid levels, she acknowledged.

Economic growth is expected to pick up in 2023, albeit with downside risks to the outlook stemming from global uncertainty and the anticipated slowdown in developed countries, which could hinder Cambodian exports, Serey said.

“On the occasion, she asked that the British embassy present good opportunities for investment in Cambodia and increase the demand for imports from Cambodia due to the potential of the Cambodian economy, situated in a dynamic region,” the statement said.

Alluding to potential concerns regarding promotion initiatives for the local currency, Serey noted that neither the NBC nor broader government wants to forcibly de-dollarise the economy, but rather, they merely seek to encourage greater use of the riel, through means that are in step with market conditions as well as economic resilience measures.

The ambassador committed the embassy to working with Cambodia and supporting cooperation in all applicable areas, according to the statement.

Williams hailed Cambodia’s economic management – noting that inflation rose only moderately before swiftly easing back – along with its ample international reserves, and resilient banking system which he said have contributed to growth as well as mitigating fallout from Covid and the inflation wave, it added.

Of note, the UK’s Generalised Scheme of Preferences came into force on January 1, 2021, providing Cambodia with preferential trade access to the four-nation union, offsetting some of the losses due to the partial withdrawal of the EU’s ‘Everything But Arms’ scheme, which reportedly affects one-fifth of Cambodia’s annual exports to the 27-nation bloc.

In early January 2023, the NBC stated that, despite a raft of external challenges, Cambodia’s economic growth is expected to accelerate to about six per cent this year, from 5.1 per cent in 2022.

In 2022, the bilateral merchandise trade between Cambodia and the UK reached $977.439 million, up by 23.9 per cent over a year earlier, as shown by Customs data, which has been chalked up to rising post-Covid-19 demand.

The Southeast Asian nation’s exports to the UK came to $886.424 million, increasing by 21.1 per cent over 2021, while imports stood at $91.016 million, up by 60.2 per cent year-on-year, the Customs figures showed.

Cambodia’s trade surplus with the former EU member state grew by 17.8 per cent, from $675.033 million in 2021 to $795.408 million in 2022.

According to the Ministry of Commerce, notable Cambodian exports to the UK include apparel and footwear, bicycles, milled rice and other agricultural products; while major imports comprise vehicles and machinery.

Similarly, the UK accounted for $1.4 billion or a 3.4 per cent share of the cumulative total of 168.8 trillion riel ($41.0 billion) in foreign direct investment (FDI) recorded by Cambodia in the 10,011-day period from the August 5, 1994 promulgation of the old Law on Investment to December 31, 2021, according to the NBC.