The
Asian Development Bank yesterday countered Prime Minister Hun Sen’s prediction
that gross domestic product growth will reach 8.7 percent this year, citing a
smaller projection of 6.8 percent in its annual Asian Development Outlook
update.
The premier quoted the growth figure in a
speech given on Monday, though the ADB claimed a number of significant factors
were not taken into account.
“The estimate referred to by Hun Sen was
published in July, which means it was likely based on first-quarter data,
whereas our projection is based on data from around July,” said ADB senior
country economist Peter Brimble at a briefing yesterday.
Cambodia’s economic outlook in April was
deemed largely positive, with ADB citing growth of 6.5 percent. However, global
factors such as the earthquake and tsunami in Japan in March and the sovereign
debt crises in the US and Europe were still to affect the Cambodian economy, he
said.
Cambodian Economic Association president Chan
Sophal agreed with the ADB’s projection, stating it appeared to be a realistic
growth outlook.
“ADB’s estimate of 6.8 percent sounds more
reasonable and is a more timely prediction,” he said.
“ADB has evidently taken into account a wider
variety of factors and seems to have more information on which to formulate
their projection.”
While ADB’s prediction for 2011 is
considerably lower, the factors attributed to the growth correspond with those
provided by Hun Sen earlier this week.
The revision was driven mainly by a surge in
garment exports, particularly to the US, which grew by 23 per cent year-on-year
during the first half of this year.
Tourism arrivals had risen by 13 per cent and
rice exports had maintained an upward trend as well, the ADB report stated.
“Cambodia will maintain solid economic growth
for 2011, given the faster-than-expected recovery of garments, exports and
tourism, as well as the positive outlook for the expansion of agricultural
products,” Brimble said.
The US and the euro zone, the two largest
importers of Cambodian garment products, have respective GDP growth projections
of 1.6 and 1.7 per cent, according to the report.
But with the instability of those markets
likely to continue, the bank echoed the prime minister’s sentiments on
diversifying the Kingdom’s economy. Brimble stressed that Cambodia needed to
address some long-standing challenges to achieve sustainable growth.
“Economic diversification has clearly been a
challenge for a while. It’s already happening, but it needs to accelerate,
particularly within the agriculture and tourism sectors,” he said.
Brimble added that the slowdown in global
trade was likely to temper growth momentum into next year, with the report
forecasting a return to 6.5 per cent growth during the first half of 2012.
Vietnam’s inflation rate, which stands at 22
per cent, was another potential concern for Cambodia, considering the volume of
bilateral trade between the countries, Brimble said.
Because of the fall in global oil prices,
Cambodia’s inflation rate was expected to average 5.5 percent throughout 2011
and 2012, unchanged from the initial projection, the report said.
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