cambodia’s macroeconomic progress a journey of 25 years€¦ · cambodia’s macroeconomic...
TRANSCRIPT
Cambodia’s Macroeconomic Progress
A Journey of 25 Years
October 05th, 2016
1
Contents
1. GDP Performance 2. Sectoral Performance
3. Fiscal Performance 4. Financial Sector Performance
5. Global and Domestic Challenges 6. Ways Forward
2
Key Development Highlights
- Economic Status: Low Income- Economic structure: agriculture-based - Nominal GDP: $5.3 Billion - GDP per capita: $417 - Poverty rate: 53.2% - Gini Coefficient: 0.38% - Unemployment rate: 1% - Total trade volume: $5,857 million - Export: $2,588 million - Domestic Revenue: 2,220 Billion Riels- Asian financial crisis led to weaker economic growth in 1998.
- Economic Status: Lower Middle Income
- Economic structure: Less agriculture dependent
- Nominal GDP: $19.8 Billion - GDP per capita: $1,300- Poverty rate: 13.5% (2014)- Gini Coefficient: 0.29 (2014)- Unemployment rate: 0.1% (2014)- Total trade volume: $22,035 million - Export: $9,231 million- Domestic Revenue: 14,359 billion Riels- Financial sector: Rapid-growing yet
stable- Internal and external balance
- IDP: skill-driven industry by 2025 - Vision 2030: Upper middle income economy- Vision 2050: High income
2 Decades ago
2016
Going forward
2004
1993- Economic Status: Low Income- Economic structure: agriculture-based - Nominal GDP: $2.5 Billion- GDP per capita: $229 - Total trade volume: $769 million- Export: $283 million - Domestic Revenue: 290 Billion Riels
3
1. GDP Performance
4
Cambodia’s economic prospect remains robust, yet vulnerable to both internal and external risks…
Major Growth Drivers
1st Construction(Contribution to GDP growth 1.23%)2nd: Garment(Contribution to GDP growth 1.17%)
1st: Garment(Contribution to GDP growth 1.73%)2nd: Construction (contribution to GDP growth 1.25%)
Source: National Institute of Statistics, Ministry of Planning, 2016Note: MEF team’s projection for 2016 and 2017
GD
P gr
owth
and
Sec
tori
al C
ontr
ibut
ion
to g
row
th
9.1%
8.1%
6.6%
8.5%
10.3%
13.3%
10.8%10.2%
6.7%
0.1%
6.0%
7.1% 7.3% 7.4% 7.1% 7.0% 7.0% 7.0%6.8%
6.7%
-4%
-2%
0%
2%
4%
6%
8%
10%
12%
14%
16%
1994 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016e 2017p 2018p 2019p
Agriculture Industry Services GDP Growth
- Yearly average growth (1996 - 2015): 7.7%- Nominal GDP:
+ 1996: 3,486 Million USD+ 2015: 18,078 Million USD
- GDP per capita: + 1996: 295 USD+ 2015: 1,215 USD
5
Cambodia is gradually transforming into an industrialized economy…
Source: National Institute of Statistics, Ministry of Planning, 2016Note: MEF team’s projection for 2016-2019
45.3%
35.9% 34.3%31.1% 32.0% 29.4% 30.7% 30.1% 29.7% 32.8% 33.5% 33.9% 34.6% 33.5% 31.6% 28.9% 26.6% 25.7% 24.6% 23.7% 23.0%
12.6%21.9% 22.3%
24.3% 25.0%25.6% 25.0% 26.2% 24.9% 22.4% 21.7% 21.9% 22.1% 23.0% 24.1%
25.6% 27.7% 29.1% 30.3% 31.1% 31.8%
39.4% 37.1% 38.4% 39.3% 38.2% 39.3% 39.1% 38.7% 38.5% 38.8% 38.8% 38.3% 37.5% 37.8% 38.5% 39.7% 39.8% 39.2% 39.0% 38.8% 38.6%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1993 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016e 2017p 2018p 2019p
Agriculture Industry Service
Share of industry continues expanding while that of agriculture is shrinking...
57.4% 57.7% 55.6% 57.6% 54.2% 55.8%51.0% 48.7% 45.3%
13.3% 14.9% 15.8%15.9%
16.2%16.9%
18.6% 19.9% 24.3%
29.1% 27.4% 28.6% 26.5% 29.6% 27.3% 30.4% 31.5% 30.4%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
2004 2007 2008 2009 2010 2011 2012 2013 2014
Agriculture (Primary) Industry (Secondary) Services (Tertiary)
Share of Employed Population by
Increasing labor share in industry….
Source: Ministry of Planning, 2015
6
Source: National Institute of Statistics, Ministry of Planning, 2016Note: MEF team’s projection for 2016 - 2019
Nominal GDP increased 8 folds from 1993 to 2016…
2,4803,649 3,984 4,280 4,663
5,3396,293
7,2758,631
10,337 10,40011,634
12,96514,054
15,229
16,79618,078
19,843
21,983
24,065
26,472
-
5,000
10,000
15,000
20,000
25,000
30,000
1993 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016e 2017p 2018p 2019p
Mill
ion
USD
7
Given its robust growth rate of 7.7% for the last 2 decades, Cambodia has become one of the 8th Olympians of growth, making it the sixth faster growing country in the world over that period…
Source: World Bank8
Lower middle-income economy with inclusive growth…..
Source: National Institute of Statistics, Ministry of Planning, 2016Note: MEF team’s projection for 2016 – 2019
0.38
0.41
0.38
0.34 0.34
0.31 0.29 0.27 0.295
53.2%
47.8%
29.9%
22.9% 21.1%19.8%
18.9%
16.0% 13.50%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
0
0.05
0.1
0.15
0.2
0.25
0.3
0.35
0.4
0.45
2004 2007 2008 2009 2010 2011 2012 2013 2014
Gini Coefficient (Left Axis) Poverty Rate (Right Axis)
Cambodia has been world leader in poverty reduction…
Source: Ministry of Planning (for poverty rate and Gini coefficient from 2007 to 2014)World Bank (for poverty rate in 2004)
229
288319 340
367417
487
558
656
760 753
830
911
973
1,042
1,138
1,215
1,300
1,422
1,537
1,669
-
200
400
600
800
1,000
1,200
1,400
1,600
1,800
1993 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016e 2017p 2018p 2019p
USD
GDP Per Capita increased 5.6 times from 1993 to 2016…
9
10
GiniCoefficient 2004 2005 2006 2007 2008 2009 2010 2011 2012
Thailand 0.43 n/a 0.42 0.40 0.40 0.40 0.39 0.37 0.39
Vietnam 0.37 n/a 0.37 n/a 0.38 n/a 0.43 n/a 0.39
Lao PDR n/a n/a n/a 0.37 n/a n/a n/a n/a 0.38
Philippines n/a n/a 0.44 n/a n/a 0.43 n/a n/a 0.43
Indonesia n/a 0.34 n/a n/a 0.34 n/a 0.36 n/a n/a
Povertyrate (%) 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Thailand 26.8 .. 21.9 20.0 20.4 17.9 16.4 13.2 12.6 10.9 10.5
Vietnam .. .. .. .. .. .. 20.7 .. 17.2 .. 13.5
Lao PDR .. .. .. 27.6 .. .. .. .. 23.2 .. ..
Philippines .. .. 26.6 .. .. 26.3 .. .. 25.2 .. ..
Myanmar .. .. .. .. .. .. .. .. .. .. ..
Indonesia 16.7 16.0 17.8 16.6 15.4 14.2 13.3 12.5 12.0 11.4 11.3
Malaysia 5.7 .. .. 3.6 .. 3.8 .. .. 1.7 .. 0.6
Source: WDI, World Bank, 2016
Gini Coefficient and Poverty Rate in Asia
Cambodia Has Been One of The “MDG Trailblazers”, Although StillLags Behind in Some Human Development Dimensions
11
2. Sectoral Performance
12
Industry sector remains driven by garment sector, however, increased domestic production has beenobserved in other sectors, i.e. food and beverages, light manufacturing industry…
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016e 2017p 2018p 2019pGarment 68.2 28.4 21.4 16.8 24.9 9.2 20.4 10.0 2.2 (9.0) 18.5 19.9 6.5 10.7 6.6 9.8 10.3 9.7 8.7 7.8Construction 36.8 (1.8) 27.1 11.1 13.2 22.1 20.0 6.7 5.8 5.0 (25.5) 7.9 18.2 13.7 21.4 19.2 15.9 13.4 10.4 10.0Other industry 0.9 (1.0) 3.3 3.9 2.3 12.4 11.0 6.0 7.2 (27.8) 63.5 6.2 10.2 8.4 9.6 9.3 9.4 9.4 9.2 9.2Industry Sector 31.2 11.2 17.1 12.0 16.6 12.7 18.3 8.4 4.0 (9.5) 13.6 14.5 9.3 10.7 10.1 11.7 11.4 10.5 9.2 8.6
(40.0)
(20.0)
-
20.0
40.0
60.0
80.0Growth of Industry and Its Sub-sectors
Source: National Institute of Statistics, Ministry of Planning, 2016Note: MEF team’s projection for 2016 - 2019
Gro
wth
in P
erce
nt
13
Service sector growth remains subdued, mainly driven by the slowdown of tourismand real estate sector…The slowdown of tourism sector is offset by growth of domestic trade, coupled with transport and communication...
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016e 2017p 2018p 2019pHotels and Restaurants 19.0 22.6 18.8 (16.8) 23.4 22.3 13.7 10.2 9.8 1.8 11.2 6.6 12.5 13.8 6.1 2.4 2.2 3.0 2.9 2.7Other Services 7.9 9.8 6.3 9.0 12.1 12.0 9.7 10.1 8.9 2.4 2.3 4.8 7.5 7.9 9.2 7.8 7.4 7.4 7.3 7.4Service 8.9 11.1 7.7 5.9 13.2 13.1 10.1 10.1 9.0 2.3 3.3 5.0 8.1 8.7 8.7 7.1 6.7 6.8 6.8 6.8
-
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
(20.0)
(15.0)
(10.0)
(5.0)
-
5.0
10.0
15.0
20.0
25.0
30.0Growth of Service and its Sub-sectors
Source: National Institute of Statistics, Ministry of Planning, 2016Note: MEF team’s projection for 2016 - 2019 14
Despite slight recovery, growth of agriculture remains slow due to sluggish commodity pricesand delay in implementing supporting policies…
A continued decline in fisheries, low rice production and low growth of livestock and poultry remain challenges...
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016e 2017pFisheries 5.0 5.9 0.6 1.7 -1.7 5.6 3.8 0.8 6.5 6.0 2.4 3.1 6.7 5.4 0.1 0.3 -0.1 -0.5Crop 2.4 0.6 -4.8 21.9 -2.3 27.6 5.3 8.2 6.6 5.8 5.7 4.3 4.9 0.6 0.5 0.3 1.0 1.7Livestock and Poultry -8.8 10.8 -1.1 5.7 3.9 5.6 8.2 3.7 3.8 5.0 2.1 0.2 0.8 0.1 0.2 0.0 0.8 0.3Forestry and Logging -12.4 -1.5 -4.3 -3.0 0.8 5.1 7.0 1.1 0.9 1.1 0.2 -0.1 -2.5 -2.9 -1.2 -0.8 -1.6 -1.6Agriculture -0.4 3.6 -2.5 10.5 -0.9 15.7 5.5 5.0 5.7 5.4 4.0 3.1 4.3 1.6 0.3 0.2 0.5 0.8
-15.0
-10.0
-5.0
0.0
5.0
10.0
15.0
20.0
25.0
30.0
Source: National Institute of Statistics, Ministry of Planning, 2016Note: MEF team’s projection for 2016 - 2019 15
Inflation remains favorably low under 5% due to the low level of oil and commodity price...
Source: National Institute of Statistics, Ministry of Planning, 2016Note: MEF team’s projection for 2016 and 2017
-0.8% -0.9%
-0.1%
1.2%
3.9%
5.8%4.7%
5.9%
19.7%
-0.6%
4.0%5.5%
2.9% 3.0%3.9%
1.2%2.8%
3.7% 4.2%3.2%
-5.0%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016e 2017p 2018p 2019p
Inflation in Riel (% increase, year average)
16
Cambodia’s overall balance of payment remains stable, with continued compression of trade and current account deficits, thanks to the increased domestic production…
Source: National Bank of Cambodia, 2016Note: MEF team’s projection for 2016 - 2019
Balance of Payment
2011 2012 2013 2014 2015 2016e 2017p 2018p 2019pExport 38.9 40.1 42.9 44.1 46.8 46.2 46.2 47.2 47.2Import 55.4 57.9 64.0 63.2 66.0 64.1 63.0 62.5 61.5FDI 10.4 12.1 12.0 10.0 9.1 10.3 10.5 10.6 10.9Trade Balance -14.3 -17.8 -21.1 -19.1 -19.2 -17.9 -16.8 -15.4 -14.3Current Account Balance (including official transfer) -5.9 -8.2 -13.0 -9.8 -9.6 -9.1 -8.5 -7.5 -6.8
-30.0
-20.0
-10.0
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
% o
f GD
P
17
Export Product Diversification: From garment export to rice and others (electroniccomponents, bikes...)
Source: Ministry of Economy and Finance, 2016
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015Others (Electronic components, bicycles, etc.) 3.2% 6.1% 3.6% 1.9% 2.6% 2.0% 2.3% 2.4% 9.4% 7.8% 7.4% 12.6% 16.6% 21.5% 21.1%Rubber 1.8% 0.3% 1.0% 1.8% 1.6% 1.5% 1.3% 1.2% 1.8% 2.5% 4.0% 3.0% 2.5% 1.9% 1.8%Rice 0.2% 0.3% 0.0% 0.1% 0.1% 0.1% 0.0% 0.1% 0.4% 1.0% 2.2% 2.4% 3.8% 3.1% 3.4%Garment 94.8% 93.3% 95.3% 96.2% 95.8% 96.4% 96.3% 96.4% 88.4% 88.8% 86.4% 82.0% 77.1% 73.5% 73.7%
Export by Products
18
Source: Ministry of Economy and Finance, 2016
Export Market Diversification: From export to the US to export to EU, Japan,...
3.2% 5.4% 3.6% 2.6% 3.0% 2.9% 3.0% 3.2% 7.8% 4.5% 6.2% 7.2% 9.3% 11.7% 11.1%
25.6% 24.6% 24.5% 28.2%21.5% 21.5% 21.7% 22.4%
23.8%25.0%
30.0% 32.1%33.4%
34.1% 37.9%
66.5% 65.2% 64.5% 60.8%66.1% 66.1% 64.3% 61.8% 52.5% 52.3% 42.6% 36.7% 31.4% 26.7% 23.9%
0.8% 1.1% 1.1% 1.1% 1.1% 1.1% 1.0% 0.9% 2.6% 2.4%3.1% 3.5% 4.8% 5.7% 6.8%
4.0% 3.6% 6.3% 7.4% 8.3% 8.4% 10.1% 11.8% 13.2% 15.7% 18.1% 20.5% 21.1% 21.8% 20.2%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Share of Export Value by Countries
ASEAN EU USA JAPAN Others
19
3. Fiscal Performance
20
The recent success in revenues mobilization has been attributed to strengthening of tax and non-tax administration, increasing taxpayers’ compliance and robust economic growth…
Source: Ministry of Economy and Finance, 2016
1993 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015e 2016BL 2017p 2018p 2019p
Domestic Revenue (Left Axis) 290 1,423 1,564 1,786 1,821 2,220 2,719 3,394 4,223 5,567 5,137 6,182 6,693 8,594 9,300 11,549 13,190 14,359 16,232 18,302 20,619Expenditure (Left Axis) 608 2,040 2,558 3,013 2,995 3,043 3,389 4,203 5,151 6,681 8,938 10,176 10,943 12,406 13,476 14,598 15,328 18,284 20,546 22,787 25,143Domestic Revenue % of GDP 4.3% 10.1% 10.0% 10.6% 9.8% 10.4% 10.6% 11.4% 12.1% 13.3% 11.9% 13.1% 12.9% 15.2% 15.2% 17.0% 18.0% 17.9% 18.2% 18.5% 19.0%Expenditure as % of GDP 8.9% 14.5% 16.4% 18.0% 16.2% 14.2% 13.2% 14.1% 14.7% 15.9% 20.8% 21.6% 21.0% 21.9% 22.0% 21.6% 20.9% 22.8% 23.1% 23.1% 23.2%Overall Deficit as % of GDP -4.7% -4.3% -6.0% -7.2% -5.4% -3.8% -2.7% -3.3% -2.8% -2.9% -8.8% -8.5% -8.2% -6.7% -6.8% -4.5% -2.9% -4.9% -4.8% -4.5% -4.2%
290
14,359
608
18,284
4.3%
17.9%
8.9%
22.8%
-4.7%-4.9%
-15.0%
-10.0%
-5.0%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
-
5,000
10,000
15,000
20,000
25,000
30,000
Bill
ion
Rie
ls
21
22
Tax revenue (% of GDP)
2013 2014 2015Bangladesh 8.5 8.1 8.0Indonesia 12.5 12.1 11.9Lao 15.0 15.5 15.0Malaysia N/A N/A N/APhilippines 14.5 14.8 14.8Thailand 18.7 17.2 17.8China 18.7 18.6 18.3Sri Lanka N/A N/A N/AVietnam 19.1 18.2 17.9Singapore 13.5 14.0 13.9India 16.8 16.7 17.4
Source: World Economic Outlook Database, 2016
Revenue as a Share of GDP of Cambodia’s ASEAN Peers
Source: Ministry of Economy and Finance, 2016
Less reliance on international trade tax while expanding domestic base…..
59% 57% 63% 64% 66% 66% 65% 69% 69% 71% 72% 74% 72%
23% 21%21% 21% 20% 19% 18% 17% 15% 15% 15% 14% 15%
0%
10%
20%30%
40%
50%
60%
70%
80%
90%100%
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016BL
Share of Current Revenue
Domestic Tax International Trade Tax
23
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016BL
2.0%
1.7% 1.8% 1.8%
1.4%
1.3% 1.4% 1.
6% 1.8% 1.8%
1.6%
2.3%
2.0%
1.8% 1.
9%
1.9% 2.0%
3.2%
2.7%
2.4%
2.2%
2.0%
1.8%
1.7% 1.
8% 2.1%
3.5%
2.8%
2.7% 2.8% 2.
9% 3.1% 3.2% 3.
4%
2.6% 2.
9%
3.5%
3.3%
3.1%
2.8% 2.
9%
3.0% 3.
2%
3.8%
3.8%
3.8% 4.
0% 4.3% 4.3% 4.
6%
5.3%
0.8% 1.
0%
1.0%
0.9%
0.7%
0.7% 0.7%
0.7% 1.
0%
0.8% 0.
9%
0.8% 0.8% 0.9% 1.
2% 1.4% 1.4%
General Administration Defense and Security Social affairs Economic sector
Source: Ministry of Economy and Finance, 2016
More attention towards social affairs…
24
Cambodia’s debt distress rating remains low….
Source: Ministry of Economy and Finance, 2016
2,612 2,880 3,1573,650
4,2814,877 5,284 5,651
6,2987,011
7,7678,567
25.3%
27.7% 27.1%28.2%
30.5%32.0% 31.5% 31.3% 31.7% 31.9% 32.3% 32.4%
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
0.00
1,000.00
2,000.00
3,000.00
4,000.00
5,000.00
6,000.00
7,000.00
8,000.00
9,000.00
2008 2009 2010 2011 2012 2013 2014 2015 2016e 2017p 2018p 2019p
Mill
ion
USD
Debt Stock (Million USD) Debt-to-GDP Ratio
25
4. Financial Sector Performance
26
Source: National Bank of Cambodia, 2016
Despite the moderation in credit growth, the loan-deposit ratio of the financial system still remains high, requiring effective monitoring and supervision of financial institutions…
28.6
%
25.6
%
34.4
%
41.1
%
46.9
%
56.4
%
61.4
%
76.5
%
83.5
%
77.9
%
84.8
%
19.8
%
26.1
%
27.4
%
31.8
%
38.9
%
48.2
%
57.2
%
69.8
%
83.2
%
73.3
%
81.7
%
69.4
%
102.
2%
79.5
%
77.4
%
83.0
%
85.4
%
93.2
%
91.2
%
99.7
%
94.1
%
96.3
%
74.6%
7.1%
38.2%
30.3%
26.5%
30.9%
17.8%
36.9%
18.8%
28.0%
19.2%
81.6%
57.7%
7.5%
26.8%
35.6%34.7%
28.6%
34.1%
29.9% 35.8%
22.0%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
0.0%
20.0%
40.0%
60.0%
80.0%
100.0%
120.0%
2007 2008 2009 2010 2011 2012 2013 2014 2015 Jun-15 Jun-16Deposit to GDP Ratio Credit to GDP Ratio Loan to Deposit Ratio Total Deposit Growth Total Credit Growth
Total Credit and Deposit in Financial Sector
27
Source: National Bank of Cambodia, 2016
Financial sector continues expanding….
28
41 845
1,56
0 2,41
9
2,54
1 3,16
7
4,33
7
5,89
0
7,41
4
9,61
5
12,0
32
36 1,39
3
2,46
2
2,63
5
3,56
6 4,58
9 5,88
0 7,65
1 8,91
8
11,8
57 13,7
83
20
24
3133
35 35
39
44 4647
0
5
10
15
20
25
30
35
40
45
50
0
2000
4000
6000
8000
10000
12000
14000
16000
1993 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Mill
ion
USD
Bank Credit Bank Deposit Number of Banks
87 152
278
300 41
3
636 87
7 1,30
7
2,03
5
3,01
5
3 5 5 10 40 114
275
442
912
1,30
5
16 17 1820
25
30
35 3639
53
0
10
20
30
40
50
60
0
500
1,000
1,500
2,000
2,500
3,000
3,500
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015M
illio
n U
SD
MFI Credit MFI Deposit Number of MFIs
Robust and inclusive
growth with macroeconomic
stability
Asia’s tiger and lower middle
income economy
Diversification of export
products and markets
Impressive poverty
reduction and shared
prosperity
Self-dependence and
self-determination
Major Achievements over 25 Years
29
5. Global and Domestic Challenges
30
Global Risks Global Opportunities
1. Brexit: causing uncertainty in global recovery Regional integration policies in concert with open and favorable policies for investment in all sectors
2. Weak key fundamental strength (growth rate, inflation, unemployment…)
Strategic location for connecting with ASEAN and Greater Mekong Sub-region in developing infrastructure and strengthening production clusters for regional and international markets
3. Direction of monetary policy Factory relocation from China
4. New forms of trade barriers China’s transitioning from domestic investment led economy to consumption-led economy
5. New international agreements, such as TPP, etc. Growing middle class, especially in China
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Major Domestic Challenges Major Domestic Opportunities
Sustaining high economic growth and inclusiveness Fast growing middle class
Slow structural reforms and economicdiversification, and weak competitiveness
Regional integration policies in concert with openand favorable policies for investment in all sectors
Rapid expansion of financial sector
Strategic location for connecting with ASEAN andGreater Mekong Sub-region in developinginfrastructure and strengthening production clustersfor regional and international markets
Slow growth of labor productivity/TFP Demographic dividend
Climate change
Fiscal sustainability and fiscal space
Low complete rate of secondary education and lack of skills
Logistics and transportation system32
6. Ways forward
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Ways forward for upper middle income economy by 2030 and high income economy by 2050
Continue implementing macro-prudential policy
Strengthening economic competitiveness and diversification
- Skill development
- Improving logistic and transport system
- Trade facilitation
- Reducing cost of doing businesses
- Effective and timely implementation of IDP 2015 - 2025
Strengthening education system and research and development
Reviving agriculture: New agriculture strategy?34
Financial resource management • Improve tax system• Fiscal sustainability and fiscal space• Building budget linkage to policy and accountability• Ensuring efficiency at both levels
• allocative • operational
• Strengthening financial stability and resiliency• Development of capital market
Development and promotion of Public Private Partnership Promoting social inclusion and protectionUrbanization and city planning Environmental protection:
• Climate resilience• Climate change adaptation
Strengthening governance, institution and public sector reforms: civil service, judiciary, etc….35
Ways forward for upper middle income economy by 2030 and high income economy by 2050
Congratulations !!!
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