The National Bank head said that the World Bank growth figures for 2009 failed to account for the possibility of higher agriculture yields
Photo by: Tracey Shelton
Strong agricultural yields might help economic growth exceed World Bank estimates, said the National Bank.
THE Director of the National Bank of Cambodia rejected Thursday a gloomy World Bank assessment for the Cambodian economy that predicted 4.9 percent growth for 2009.
The World Bank figures stand in sharp contrast to government predictions of 6.5 percent growth for 2009.
"The [World Bank] prediction is not completely correct. It can be slightly wrong," said Tal Nay Im, director general of the National Bank of Cambodia.
She pointed to agricultural yields as a source of growth next year, saying that favourable weather next year will boost the local economy.
She told the Post on Thursday that the World Bank forecast was based on the impact of the global financial crisis on Cambodia and that it over-emphasised garment exports, especially to the US and Europe, as well as tourist arrivals.
"Right now, we expect that the weather will be good [in 2009]. If there is no drought and enough rain, agricultural production will be high.
"If [agricultural] yields are high, we expect that economic growth will be above the World Bank's prediction," she said.
"But if crops are unfavourable, growth could drop to the World Bank's forecasted growth rate."
The government has repeatedly issued growth forecasts that exceed those of international institutions.
Forecasts by the Asian Development Bank, the International Monetary Fund and the World Bank have all been lower than those of the Cambodian government.
The World Bank on Wednesday said that Cambodia's openness to the global economy has also exposed it to international market fluctuations.
Officials from the bank said by video link from Tokyo that the economy would likely bottom out at the end of 2009. The banks said the current crisis would be "at least as bad" as 1982 and that the current troubles represent a "structural break" from past economic cycles.
Ouk Rabun, a secretary of state at the Finance Ministry, said the growth for 2009 will be 6.5 percent and inflation rate will drop to 10 percent.
ADDITIONAL REPORTING BY GEORGE MCLEOD