Neth Pheaktra
The Mekong Times
Cambodian economic performance remains robust though the pace of growth is expected to ease to around 7 percent in 2008, down from over 10 percent last year according to an International Monetary Fund (IMF) statement released Friday.
An IMF staff mission led by Luis Valdivieso, visited Cambodia from May 28 - June 5, to hold discussions with senior Cambodian government officials on macroeconomic developments and policies. The mission also met representatives from the business community and development partners.
The IMF said the drop in economic growth to around 7 percent this year mirrors slowing growth in the garment sector. Garment exports are under pressure because of a decrease in international demand and intensified regional competition, the IMF explained.
Cambodia’s garment industry is a major contributor to the gross domestic product (GDP) with 301 factories and over 340,000 workers exporting US$2.9 billion worth of garments last year.
“Tourism continues to expand at a healthy pace,” the IMF stated, with the Tourism Ministry reporting around two million tourists visiting Cambodia last year generating a total revenue of US$1.4 billion. Cambodia’s tourism industry accounts for 15 percent of GDP and employs tens of thousands, indirectly benefiting many more.
Cambodia, as a net rice exporter, should benefit from higher rice prices, the IMF said, but it warned higher food prices will adversely affect the most vulnerable, particularly the urban poor and the landless.
Inflation, running at 18.7 percent in January, was a major IMF concern.
The IMF welcomed measures to deal with inflation – a temporary ban on rice exports and the provision of subsidies – announced by Prime Minister Hun Sen Apr 23.
The IMF emphasized that maintaining a “prudent fiscal stance is key to moderating inflation pressures,” while recommending “efforts be made to limit the overall budget deficit to around one percent of the GDP in 2008, so as to continue building up government deposits of 2 percent of the GDP in the National Bank to help contain inflation pressures.”
The IMF mission also lauded the government’s “ongoing efforts to safeguard the financial system.”
An IMF staff mission led by Luis Valdivieso, visited Cambodia from May 28 - June 5, to hold discussions with senior Cambodian government officials on macroeconomic developments and policies. The mission also met representatives from the business community and development partners.
The IMF said the drop in economic growth to around 7 percent this year mirrors slowing growth in the garment sector. Garment exports are under pressure because of a decrease in international demand and intensified regional competition, the IMF explained.
Cambodia’s garment industry is a major contributor to the gross domestic product (GDP) with 301 factories and over 340,000 workers exporting US$2.9 billion worth of garments last year.
“Tourism continues to expand at a healthy pace,” the IMF stated, with the Tourism Ministry reporting around two million tourists visiting Cambodia last year generating a total revenue of US$1.4 billion. Cambodia’s tourism industry accounts for 15 percent of GDP and employs tens of thousands, indirectly benefiting many more.
Cambodia, as a net rice exporter, should benefit from higher rice prices, the IMF said, but it warned higher food prices will adversely affect the most vulnerable, particularly the urban poor and the landless.
Inflation, running at 18.7 percent in January, was a major IMF concern.
The IMF welcomed measures to deal with inflation – a temporary ban on rice exports and the provision of subsidies – announced by Prime Minister Hun Sen Apr 23.
The IMF emphasized that maintaining a “prudent fiscal stance is key to moderating inflation pressures,” while recommending “efforts be made to limit the overall budget deficit to around one percent of the GDP in 2008, so as to continue building up government deposits of 2 percent of the GDP in the National Bank to help contain inflation pressures.”
The IMF mission also lauded the government’s “ongoing efforts to safeguard the financial system.”
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