UNDP Launches 2021 COVID-19 Economic and Social Impact Assessment in Cambodia

Posted September 29, 2021

This image was taken before the COVID-19 community outbreak by ILO Better Factory Cambodia.

Phnom Penh, 30 September 2021 –
Today, a policy brief on the 2021 socio-economic impacts of COVID-19 in Cambodia was launched by the UN Development Programme (UNDP), the Ministry of Economy and Finance and the Australian government. The brief is based on an analysis using the integrated modelling framework used previously in the 2020 assessment. It consists of a computable general equilibrium (CGE) model using actual economic data to estimate the reaction of the economy to external factors, complemented by employment and poverty modules taken from a social accounting matrix (SAM) to capture relevant economic transactions and estimate the impacts of the pandemic on economic growth, poverty, and employment. Two recovery scenarios, namely, the baseline and moderate scenarios, are considered.

Both baseline and moderate scenarios build on assumptions relating to the duration of lockdown in April and May 2021, and on the performance of agriculture, garment and non-garment exports, construction, tourism, transport, and communication sectors. The moderate scenario anticipates additional impacts from possible delays in the return of tourism and associated economic activities and a slowdown in garment exports and construction. Both scenarios also consider the effects of the social protection and economic stimulus package, and factor in the gender dimension.

The simulations suggest that economic growth will likely return to a positive figure in 2021, ranging from 1.7% to 2.3% in GDP growth, with social protection measures and an economic stimulus package in place. The unemployment rate is also shown to improve between 2.9% and 3.3%, because of the effect of social protection and the economic stimulus package, compared to the estimated rate of 4.3% reported in 2020. Similarly, both consumption and poverty situations see improvements compared to 2020 estimates. The social protection measures could stimulate total household consumption in 2021 between 0.5% and 2.3% and thus reduce the poverty rate to 11.5% and 12.5% for the moderate and baseline scenarios, respectively.

“The analysis reveals that social protection measures and the economic stimulus package adopted by the Royal Government of Cambodia were effective in counteracting significant challenges caused by the pandemic. Restimulating the economy and refitting the social protection and welfare system prevented people from sliding back into poverty and reduced the net poverty estimates for 2021 (i.e., before applying any measures) by 2.9 and 2.6 percentage points, depending on the scenario considered. These are laudable achievements worth reinforcing and expanding to promote sustainable, inclusive, and resilient socio-economic recovery powered by development financing, innovation, and digitalization to build forward better. Current and past pandemics exposed “business as usual” approaches and highlighted the importance of triggering investments and behavioral changes that reduce the likelihood and vulnerability of the country and its people to potential future shocks,” commented Ms. Alissar Chaker, incoming UNDP Resident Representative in Cambodia.

“The Royal Government of Cambodia provided considerable fiscal support to protect firms, households, and vulnerable population. Since 2020, UNDP distributional and socio-economic analysis has been supporting the Ministry in designing the government stimulus package,” said his H.E. Tep Phiyorin, Under Secretary of State at the Ministry of Economy and Finance. “Cambodia also sees opportunities to return to a high economic growth pathway, for example, through enhancing competitiveness and promoting economic diversification, as is reflected in the Royal Government’s economic recovery plan for 2021-2023.”

“Cambodia’s targeted response to COVID-19 has been critical in stabilising the socio-economic consequences of the pandemic. Australia is pleased to be supporting Cambodia to design and implement an inclusive response, demonstrating that investing in social protection can stimulate economic growth and protect the most vulnerable from deeper poverty,” said Mr. Andreas Zurbrugg, Deputy Ambassador of the Australian Embassy in Cambodia.

In addition to its technical assistance, UNDP delivered a training programme on a range of modelling tools to the Ministry of Economy and Finance’s professional economists for developing capacities on data and analytics and evidence-based policies.

UNDP supports the Royal Government of Cambodia’s response and recovery efforts from COVID-19 through promoting inclusive, sustainable growth, responsive and strong institutions, social protection, and resilience to climate risks leaving no one behind.


For media inquiries, please contact:

-    Australian Embassy Cambodia at Australian.Embassy.Cambodia@dfat.gov.au

-    Mr. Im Samruol, Head of Communications, UNDP Cambodia at samruol.im@undp.org

Press Release (Khmer): https://www.kh.undp.org/content/cambodia/km/home/_-news-centre/_-press-release/2021/_-_-_-_-_-_-_.html