According to the latest forecast from the International Monetary Fund (IMF), Cambodia economy will grow by 7 percent this year on the back of higher public spending and steady growth in construction and tourism.
The IMF’s forecast is slightly higher than the figure released by the Cambodian government, which set growth at 6.9 percent.
Data used for the projection was compiled during a fact-finding mission on March 12-16 lead by Jarkko Turunen, the deputy division chief. During the visit, the IMF team held discussions with key officials and economic players on the latest development in the country and its economic outlook.
In a statement released on March 17, Mr Turunen said the new growth rate projection is the result of higher public spending and robust economic activity in the construction and tourism sectors.
Other factors include declining inflation, which slowed down to 2 percent in January; a stable current account deficit, which equalled 8.4 percent of gross domestic product (GDP) in 2017; as well as growing foreign reserves, which, in the beginning of the year, reached $8.9 billion.
“Cambodia’s economic outlook remains positive, but is subject to downside risks,” Mr Turunen said in his statement.
“Macro-financial and external risks remain significant and political uncertainties could dampen consumer and investor sentiment. On the upside, stronger global growth may increase foreign demand for goods exports and tourism.
“Policies should focus on managing macro-financial risks, safeguarding fiscal sustainability and advancing reforms to support growth, resilience and inclusion.”
The Cambodian government’s own growth projection is 6.9 percent, which it attributed to the strong performance of the agriculture and service sectors, as well as robust industrial activity. GDP per capita, the government said, will reach $1,569 by the end of the year.
“With strong economic growth, our level of dependency on foreign nations will be reduced, helping us attain full control of our own economy,” Vong Seyvisoth, Secretary of State at the Ministry of Economy and Finance, said during a forum on the national budget for the year 2018 held in January.
