Cambodian government dismisses Asian Development Bank’s latest GDP growth prediction of 2.5 percent for this year as too pessimistic
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
2008: 6.5 percent
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