CAMBODIA’S gross domestic product achieved “slight growth” last year despite the fallout from the global economic crisis, according to preliminary financial results, Prime Minister Hun Sen said on Wednesday.
The prime minister made the statement in front of around 300 private-sector, government and civil-society leaders at the Cambodia Outlook Conference, held in the capital’s Phnom Penh Hotel.
“Recent estimates suggest that GDP growth last year remained positive, even though it was only slight growth.
“This was supported by good results in the agriculture and service sectors, which grew at 5.4 percent and 2.3 percent respectively,” said the premier in a keynote speech.
He added that growth sectors had offset declines in other industrial areas such as garments, which slid 9 percent. He went on to predict that 2010 should see GDP rise by 5 percent.
Hang Chuon Naron, secretary general of the Ministry of Economy and Finance, told the Post after Tuesday’s conference that the primary result for 2009’s GDP growth was recorded at 0.1 percent. The finalised figure is set to be released in June, Hun Sen said.
The government’s positive estimate differed sharply with that of the International Monetary Fund (IMF).
Speaking after Hun Sen, John Nelmes, the IMF’s representative for Cambodia, said overall GDP was estimated to have contracted by 2.5 percent last year. However, he remained positive about the country’s outlook.
“After the economy bottomed out late last year, recovery is now under way in Cambodia,” he said.
“The IMF estimates that growth will turn positive this year, with GDP rising by 4 percent, but I would not rule out the prime minister’s forecast of 5 percent,” he added.
In 2008, the World Bank estimated that Cambodia’s GDP was US$9.4 billion.
Hun Sen emphasised during the conference, which discussed measures needed for Cambodia to become a high-growth economy, the importance of the agricultural sector as a “potential engine of growth” in the medium to long term.
The IMF also described the sector’s growth as a “bright spot” during 2009’s economic decline.
This was later challenged by Cambodian Economic Association President Chan Sophal, who stated that despite the apparent growth in the sector, many cassava farmers had found it hard to sell crops in 2009.
Hun Sen went on to predict sustainable growth in the agricultural sector, especially in rice and rubber production. But the premier did temper his largely positive message.
He warned that the nation must remain vigilant of the economic “storm”, despite the apparent upturn.
“The weather seems calm, but the sky is not clear. More rain may or may not come. However, we have to prepare raincoats and umbrellas in advance,” he said.
The premier talked of the need to save money, reiterating that he would freeze government recruitment, with the exception of teachers and medical workers.
Economic experts were also frank about the measures that Cambodia needs to put in place, if the Kingdom is to move up the world’s economic ladder.
Nelmes said that Cambodia should aim for GDP growth of 6 to 7 percent to become a middle-income country, but warned: “Going forward, [Cambodia] needs to be very careful to avoid having an inflation problem.”
Vietnam previously set itself a target of this year to become a middle-income nation.
Hang Chuon Naron talked of the need to create a “better quality of growth” for the domestic economy.
He explained that small-scale land development, which has the potential to increase employment, is an important factor to consider along with the introduction of large land concessions.
“This is a balancing act,” he said.