The International Monetary Fund (IMF) projected that Cambodia will have a very low inflationary rate to 3.5 per cent this year, which is 0.1 per cent below the goverment’s new revision but 0.5 per cent higher than the Asian Development Bank (ADB).
Olaf Unteroberdoerster, senior economist for the IMF’s Asia Pacific Department, conducted a mission trip to Cambodia between September 25 to October 5 to meet with government officials and other relevant stakeholders to evaluate the development of the Cambodian economy.
“Resilient exports, robust tourism and a strong real estate recovery continue to support Cambodia’s economy despite the global slowdown,” said Unteroberdoerster during the press conference on Friday.
He said after decelerating through mid-year, inflation is projected to average about 3.5 per cent in 2012 and 4 per cent in 2013.
“We believe that the current rate of the inflation is nice,” he said. “We have seen a deceleration of inflation to the middle of this year, inflation in July actually declined to about 1 per cent.
“It will continue to pick up next year as the economy rapidly expands. But, the inflation is nice. It is not of concern.”
Cambodia’s government in August also revised inflation from 5 per cent to 3.6 per cent.
The IMF projected GDP growth to 6.5 per cent in 2012. Over the medium term, Cambodia’s growth rate could reach 7.5 per cent, provided there is continued improvement in the business climate, infrastructure and public service delivery.
During the first half of 2012, garment exports expanded by 14 per cent and tourist arrivals by 27 per cent compared to the same time last year.
“We have seen that despite the global recovery in 2012 and sluggish demand from the advanced economy, Cambodia’s economy has hiked up relatively well,” said Unteroberdoerster.
“What is important to know here is the tourist arrivals continue to grow rapidly and the garment exports continue to expand although there is a moderation from export growth last year."
Meanwhile the ADB’s Asian Development Outlook 2012 (ADO) update released on Wednesday predicted Cambodia’s gross domestic product to grow by 6.4 per cent in 2012 and 6.8 per cent in 2013, a slight drop from ADB’s earlier projections of 6.5 per cent and 7 per cent in the ADO of April 2012.
To contact the reporter on this story: May Kunmakara at [email protected]