PHNOM PENH, Nov 7 (Reuters) - The global slowdown will probably mean lower foreign investment in Cambodia and its economic growth is likely to slow to 6.5 percent this year and 4.8 percent in 2009, an IMF official said on Friday.
"We see that the external conditions will continue to be very challenging," David Cowen, deputy division chief in the Asia and Pacific department at the International Monetary Fund, said at the end of a visit to the Southeast Asian country.
"We are expecting foreign investment to be lower next year and that is one of the reasons we are forecasting a lower growth rate in the construction sector," he told a news conference.
In June the IMF forecast economic growth of 7 percent this year after 10.25 percent in 2007.
Cowen said Cambodia had attracted around $750 million in foreign direct investment (FDI) in 2008 but the figure was likely to be 25 to 30 percent lower next year.
Demand for garments, Cambodia's main export earner, was likely to drop and tourism might suffer due to the global slowdown.
Garments brought in $3.8 billion last year and the country attracted 2.1 million tourists, helped by the return of relative political stability.
Annual inflation hit 20 percent in September but was expected to go down to around 15 percent by the end of the year because of the recent sharp drop in oil prices, Cowen said.
Continuing weakness in oil plus lower food prices and weaker domestic demand could bring inflation down further to 7.5 percent next year, he added.
He put foreign reserves at $2.2 billion as of the end of September, supported by FDI inflows and aid money.
(Reporting by Ek Madra; Editing by Alan Raybould)
"We see that the external conditions will continue to be very challenging," David Cowen, deputy division chief in the Asia and Pacific department at the International Monetary Fund, said at the end of a visit to the Southeast Asian country.
"We are expecting foreign investment to be lower next year and that is one of the reasons we are forecasting a lower growth rate in the construction sector," he told a news conference.
In June the IMF forecast economic growth of 7 percent this year after 10.25 percent in 2007.
Cowen said Cambodia had attracted around $750 million in foreign direct investment (FDI) in 2008 but the figure was likely to be 25 to 30 percent lower next year.
Demand for garments, Cambodia's main export earner, was likely to drop and tourism might suffer due to the global slowdown.
Garments brought in $3.8 billion last year and the country attracted 2.1 million tourists, helped by the return of relative political stability.
Annual inflation hit 20 percent in September but was expected to go down to around 15 percent by the end of the year because of the recent sharp drop in oil prices, Cowen said.
Continuing weakness in oil plus lower food prices and weaker domestic demand could bring inflation down further to 7.5 percent next year, he added.
He put foreign reserves at $2.2 billion as of the end of September, supported by FDI inflows and aid money.
(Reporting by Ek Madra; Editing by Alan Raybould)
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