Logo of Phnom Penh Post newspaper Phnom Penh Post - Finance minister rejects ADB's growth forecast

Finance minister rejects ADB's growth forecast

Finance minister rejects ADB's growth forecast

090402_13.jpg
090402_13.jpg

Cambodian government dismisses Asian Development Bank’s latest GDP growth prediction of 2.5 percent for this year as too pessimistic

Photo by:

TRACEY SHELTON

Finance Minister Keat Chhon rejected independent growth projections for 2009, saying that the government’s policies can lead to a better economic performance.

THE Cambodian government has rejected the Asian Development Bank's latest economic forecast of 2.5 percent GDP growth this year, saying that a strong agricultural and informal sector will lead to growth of more than 6 percent.

"I think it is hard for [the ADB] to be fortune tellers, and we hope that Cambodia will see higher economic growth because the government is walking on the right path to develop the country," Finance Minister Keat Chhon said Wednesday.

The government has rejected major independent forecasts on 2009 growth, including those of the International Monetary Fund (IMF), the World Bank, the ADB and the Economic Intelligence Unit (EIU).

The EIU forecast a 3 percent contraction, the IMF and World bank separately predicted a 0.5 percent contraction, and the ADB projects 2.5 percent growth. Analysts from all four organisations agree that a slowdown in garment sales, construction and tourism will drag down 2009 growth.

Keat Chhon told reporters outside the National Assembly on Wednesday that ADB and IMF reports were unacceptable and that their estimates failed to account for agricultural growth and the country's informal "non-system" economy.

I am determined to make cambodia’s … growth higher than the forecasts.

"We have big potential for our non-system economy, and we believe that it can help Cambodia see higher growth than the ADB and the IMF forecast," Keat Chhon added.
Agriculture to stay strong

Agriculture is expected to be the one bright spot for the year, and the ADB explained that its more optimistic forecast for productivity growth is because its analysis puts a greater emphasis on the sector.

Agricultural yields are expected to increase in 2009 as irrigation and infrastructure projects are completed. The government and agriculture organisations have also made headway establishing new markets for Cambodian agricultural products and attracting new foreign investment to the sector.

 GDP GROWTH 2009

  • Government: 6.5 percent
  • ADB: 2.5 percent
  • World Bank: -0.5 percent
  • IMF: -0.5 percent
  • EIU: -3 p
  • ercent

    2008: 6.5 percent

Government forecasts

The Cambodian government's latest prediction was that growth would hit 6.5 percent in 2009, but the finance minister said that figure is under review pending first-quarter results for the country.

"I am determined to make Cambodia's economic growth higher than the forecasts, and I won't let the country decline into chaos because the government has tools ready to move forward," Keat Chhon added.

Eric Sidgwick, the ADB's senior country economist for Cambodia, had no response to the government's latest statement, but said that the ADB and the government had "very good relations".

ADB country director Arjun Goswami said Tuesday that the Cambodian government is coping well with the crisis.

"There is an understanding of the crisis and what needs to be done.... This is a very difficult time for all organisations, including the Cambodian government," Goswami said.

The ADB also predicted that regional growth would slow to 3.4 percent in 2009 on lower exports.

ADDITIONAL REPORTING BY GEORGE MCLEOD

MOST VIEWED

  • Malaysia MP accused of ‘influencing law’

    Malaysian Member of Parliament (MP) Larry Sng arrived in Siem Reap early on Wednesday, in what was slammed by one NGO as efforts by Kuala Lumpur to “influence Cambodian law”. The Malaysian Embassy in Phnom Penh requested on January 30 “cooperation from the Ministry of Foreign

  • Ministries begin measures to offset EU’s EBA decision

    In the wake of the EU’s controversial announcement this week that it has begun the withdrawal process for Cambodia’s Everything But Arms (EBA) preferential agreement, government ministries and political analysts continued to share their reactions and economic mitigation plans in preparation for the

  • Emirates launches route connecting Phnom Penh, Bangkok

    Emirates will launch a daily service on June 1 linking Phnom Penh (PNH) and Bangkok (BKK). The service from Phnom Penh to Dubai, via Bangkok, will provide more flight options to passengers travelling between the capitals of Cambodia and Thailand. Travellers from the Southeast Asian nations

  • US Embassy urged to stop ‘disrespecting sovereignty’

    The Ministry of Foreign Affairs and International Cooperation called on the US Embassy in Phnom Penh on Saturday to respect the Vienna Convention on Diplomatic Relations after it called former opposition leader Kem Sokha “an innocent man” – a move deemed to be “disrespecting Cambodia’s