With economic uncertainty brought about by the spread of Covid-19 pandemic, the Kingdom’s 2021 business confidence index fell to 46.1 per cent from 52.9 per cent in 2019, according to the European Chamber of Commerce in Cambodia (EuroCham).

On the other hand, businesses are optimistic about future economic recovery as 56 per cent plan to invest further in the Kingdom over the next 12 months, the trade body said in its Business Confidence Survey 2021: In the Time of Covid-19.

Conducted from November 26 to January 11 with responses from over 350 businesses in EuroCham’s ranks, the survey said the Kingdom’s economy has proven resilient, outperforming predicted contractions, and is expected to make a sharp recovery this year.

While this illustrates the perseverance of businesses through these perilous times, the global pandemic has still caused substantial unforeseen socio-economic disruptions, it said.

Last year witnessed the Cambodian economy shrink for the first time in three decades, with crucial sectors such as manufacturing, construction and tourism especially bruised, it added.

“According to our members, confidence in the Cambodian market has declined – at least temporarily. The economic challenges, complexity and uncertainty caused by Covid-19 are likely the driving forces behind this decline.

“However, given that our members are concentrated in sectors heavily impacted by the pandemic – services, education, tourism and hospitality – the decline in confidence is less severe than might be expected,” it said.

The survey showed a decrease in perceived ease of doing business, with 12 per cent of businesses considering it to have become easier, compared to 18 per cent in 2019.

It said 77 per cent of businesses underperformed against their profitability targets over the past 12 months, as opposed to 32 per cent in 2019, while only 21 per cent reached their target, from 32 per cent in 2019.

In Channy, president and group managing director of Acleda Bank Plc, one of the respondents, said the Kingdom’s “doing-business” atmosphere remains “good and favourable”, despite the pandemic.

“I’m fully satisfied with the business environment, having been in the banking business during 2020. The business of banking is great and it keeps growing positively.”https://www.phnompenhpost.com/business/covid-rattles-business-confidence