Growth prediction for 2011 goes up as economy sees a rebound

Friday, 11 March 2011
Soeun Say and Jeremy Mullins
The Phnom Penh Post

THE Ministry of Economy and Finance has raised its prediction for this year’s gross domestic product growth to 7 percent, from a previous 6 percent target.

Minister Keat Chhon, speaking yesterday at a forum for South Korean businesses held in Phnom Penh, said advances in agriculture, tourism, garments and construction had fueled the stronger economic growth.

“There are good signs of a rebound in the Cambodian economy,” he said.

The International Monetary Fund had predicted 6.8 percent growth for 2011, while the World Bank and Asian Development Bank both forecast 6 percent GDP growth this year, and the Economics Institute of Cambodia said the Kingdom was poised for 7 percent growth.

EIC senior researcher Neou Seiha said yesterday he agreed that the Kingdom’s economic growth this year was faster than originally expected.

Garments, tourism, and agribusiness are all rebounding strongly, though the construction sector still lags, he said.

Cambodia’s GDP grew by double digits for much of the past decade, he said, but added much of that came from a booming construction sector.

Agribusiness holds plenty of potential to drive Cambodia’s future growth, he said.

“If the government can push this, it will be a very important sector,” he said.

Inflation could also increase this year, he said, particularly as prices for petroleum increased.

Keat Chhon said that Cambodia’s economy had grown 5.9 percent in 2010. He pointed to a 16 percent growth in tourism, 26 percent in garment exports, and 13.5 percent in industry, as well as strong increases in the agriculture and construction sectors.