The 9th NBC Annual Macroeconomic Conference 2022 kicked-off today, highlighting how financial institutions, particularly banks, continue to be crucial participants in funding the real economy and supporting recovery.
To encourage study on these challenges, the National Bank of Cambodia (NBC) has chosen the theme "Towards a Post-COVID-19 Recovery and Resilience" as this year's research subject for the conference.
The Covid-19 pandemic has exacerbated countries' economic and social vulnerability. The duration and depth of the impact are determined by individual countries' abilities to respond to the pandemic crisis, which are strongly linked to pre-crisis social and economic conditions, the severity of the impact, technical and financial capacities to implement recovery policies, and most importantly access to vaccines.
As a result, many emerging and low-income nations have struggled to find a way forward. Several nations have been attempting to develop measures to boost investment, promote digitalization, make structural changes, and so on in order to take the first steps toward recovery from Covid-19.
Cambodia is no different from the rest of the world to ensure a seamless recovery and long-term growth, the government has implemented a number of policies and reforms to protect the most vulnerable and assist prospective sectors in increasing production. Meanwhile, the private sector is assisting the nation in boosting current economic activity and has also increased its attempts to survive.
NBC conducted the 9th macroeconomic conference on Thursday to communicate research findings and foster networking in the research field. Experts, scholars, and other national and international stakeholders attended the meeting.
Chea Serey, Assistant Governor and Director General of Central Banking of NBC, said many parts of society have shifted from physical to online activities as a result of digitalization, including commerce, labor, and education.
The trend of digitization and technology adoption is increasing, which will provide a lot of benefits in terms of enhancing productivity and lowering expenses, which is especially essential in the era of rising inflation that we have been seeing this year.
“Over the years, NBC has done the modernization of the financial system, particularly the payment system, which has helped the sustainability of finance company activities; there are many elements of digitization that cannot be ignored,” Serey said.
Human capital and skill development in Cambodia have not been adequately addressed to boost global acceptance of digital usage and digital literacy. Furthermore, people with low digital skills may experience online growth; in order to achieve the path of a digital economy, Cambodia must work harder to introduce digital knowledge alongside other technical skill recipients of all ages in order to achieve the vision of promoting a digital economy and society.
Khou Vouthy, Deputy Director General of NBC, said of the banking situation before Covid 19, NBC has set out four strategies since 2016 to increase the capital of banking institutions by more than double, strengthen the capital base, and strengthen security and efficiency of the banking system.
Thus banking institutions have enough time to innovate on all the services. Moreover, NBC introduced a capital conservative buffer, if a large bank, the bank must increase the capital by a ratio of 25 percent to prevent systemic risk.
NBC expanded riel loans by roughly 10 percent of the institution's total credit throughout the crisis that may increase the banking system's financial resilience prior to the crisis by increasing pre-crisis liquidity.
NBC attempted to support long-term growth and resilience throughout the crisis and asked that all institutions evaluate loans in order to strengthen their capacity to lend or give them additional time to repay them.
Sem Sophea, Acting Director of the Macroeconomic and fiscal Policy Department at Ministry of Economy and Finance, said the Ministry has placed assistance against Covid-19 as a priority of the government, supports the cost of living, particularly for victim citizens and the poor, and sustains or facilitates SMEs that affect sectors such as tourism and health.
“The government continues to secure macroeconomic and social stability, the government spent approximately $3 billion that $1 billion for a year. It is a medium-term strategy to strengthen the economy,” Sophea said.
The implementation of the Covid-19 plan of around 10 rounds of funds that gave economic stability in 2021, the government also implemented an economic recovery strategy to live with Covid for 2021-2023.