Outlook for 2011-12

• The ruling Cambodian People's Party (CPP), led by the prime minister, Hun Sen, will remain politically dominant in 2011-12. The CPP controls more than two-thirds of the seats in the National Assembly (the lower house).
• The apparatus of the state will continue to be used against the government's opponents, such as the opposition leader, Sam Rainsy, who remains in self-imposed exile after being sentenced in absentia to a total of 12 years in prison.
• Cambodia's economy is recovering, but growth will not return to the highs of around 10% that were recorded in the years preceding the 2008-09 global recession. Real GDP will expand by 5.1% in 2011 and by 6.3% in 2012.
• Monetary policy will have to be tightened as inflationary pressures re-emerge in 2011, but the National Bank of Cambodia (NBC, the central bank) will not rush into raising the banking sector's reserve requirement.
• Although the NBC will continue to intervene in the currency markets to support the riel, the currency will depreciate against the US dollar by an average of 0.6% a year in the forecast period.
• The current-account deficit will remain substantial as a proportion of GDP in 2011­12, but Cambodia will avoid financing difficulties owing to its healthy foreign-exchange reserves and a recovery in foreign direct investment.

Monthly review

• On December 29th Cambodian soldiers detained seven Thais, including a member of parliament, Panich Wikitsreth, for illegally entering Cambodian territory in north-western Banteay Meanchey province.
• Prince Norodom Ranariddh, an ex-prime minister and the son of a revered former king, Norodom Sihanouk, has emerged from a two-year retirement to take the helm of his Norodom Ranariddh Party once again.
• In its report following recent Article IV consultations with the government, the IMF warned that Cambodia's narrow export base might be a weakness given the fragility of the global recovery.
• A property tax equivalent to 0.1% of the value of all real estate, including land, houses, apartments and any other buildings, will be imposed in early 2011. The tax is expected to bring in revenue of US$3m-4m a year.
• In late December the company behind plans for a new US$1bn international airport in Siem Reap, NSRIA, released a statement providing more details of the venture.
• A local company, Heng Development, is planning to build electric hybrid vehicles at a factory to the south of the capital, Phnom Penh.