ONE year ago Cambodia was coming to the end of its worst annual economic performance in recent memory after the global crisis hit, but just 12 months later the recovery is all but complete.
Although the government and international organisations were in disagreement over the scale of last year’s slump – the official line was economic growth of 0.1 percent while the Asian Development Bank said Cambodia’s economy contracted 0.4 percent – this year all forecasts point to growth of at least 5 percent.
Given the doom and gloom of last year the turnaround has been both fast and surprisingly robust.
ADB this week maintained a 5 percent gross domestic product growth rate for Cambodia for 2010, adding that recent economic data for developing Asia as a whole “reaffirms the view that the region is leading the world in the recovery from the recent economic crisis”. The government raised the official 2010 forecast again this quarter to 5.5 percent growth up from 4.5 percent at the start of the year, a sign that the rebound has come on stronger than anticipated.
Likewise, the World Bank raised its forecast 0.5 percentage points in October this year to 4.9 percent growth for 2010.
“There have been a few changes to the forecasts due to the strong growth in the export of garments, tourism and agriculture,” ACLEDA Bank General Manager In Channy told The Post yesterday.
The government has estimated that the rice surplus from this year will be higher than the 3.6 million-tonne surplus last year meaning more will be available for export.
Given increased processing power following investment in drying and milling machinery, Cambodia can expect to add greater value to the grain as well.
The garment industry saw 15 percent growth in exports in the first half of the year and growth in tourist arrivals were up 14.6 percent in the first nine months, government figures showed, including an increase in air arrivals, a category that usually includes higher spending tourists.
Siem Reap airport saw a 17.65 percent increase in air arrivals, while Phnom Penh saw an 11 percent rise.
In short, all of Cambodia’s key sectors have experienced significant recoveries in 2010, all except one – real estate.
With agents continuing to report low transaction levels, landlords continuing to knock down rent and prices in the market difficult to determine due to low sales activity, the property sector has been the last major area of the economy to get back to where it was pre-crisis.
But then many analysts consider the property market to have been overheated in early 2008 anyway.
Nevertheless, with the knock-on effect the property market exerts over other sectors of the economy it needs to show greater signs of life before Cambodia can talk of a complete recovery.
But otherwise all of the Kingdom’s vital economic signs are looking healthy heading into 2011.