In recent months, I have noticed that the price of goods and services in Cambodia has been increased, noticeably the price hike in fuel and gasoline, and real estates. However, I also see that other types of goods and services have been increased as well. Any way, I see that Cambodian Riel is appreciated while the US dollar is depreciated. Does it mean that the appreciation of Cambodian Riel would make the price of goods increase?

The price may also increase due to the higher demand and shortage of supply. Do you see that the increase in Cambodian population and tourist is a factor which give us an evidence that the demand has been increasing so far. Population growth is 2.4 percent per year and the foreign tourist is about two million people per year and domestic tourists is estimated around 5 million people per year. This shows a big increase in demand.

Currently, the government of Cambodia has increased its staff salary by 20% per year. The increase would mean that government staff has more money in their hand and thus their purchasing power is also higher (meaning that they spend more).

Now, we look at the supply side. Agricultural production is limited as we do not use all our natural resource potential to produce agricultural products. While some of our agricultural products are produced for exportation, we also see the huge of importation of agricultural products from other neighboring countries such as Vietnam and Thailand. The growing of agricultural production is main reason in the lacking of supply of products. On the other hand, the investment flows into Cambodia is mainly for exportation purpose, as example the garment and textile sectors. We produced in Cambodia, but not mainly to supply the demand in the country. However, I thing that there are still more reasons why there is lack of supply. Let me finish here and I will try to get more information to share with you.

Thus, what is important is to see how this increase in price would harm the living of people, especially the poor?