Minister of Economy and Finance Keat Chhon announced that a slowdown in the garment and real estate sectors could drive growth down to 5.0 percent
Photo by: TRACEY SHELTON
Finance Minister Keat Chhon pictured in this file photo. The minister’s latest prediction for 2009 puts growth at five percent.
GOVERNMENT officials have once again lowered Cambodia's economic outlook, saying the Kingdom will see only five percent growth next year.
The revision follows strident criticism by the National Bank of Cambodia governor last week of the World Bank's prediction that growth would shrink to 4.9 percent next year. Previous government predictions vary from nine percent earlier this year to 6.5 percent last week.
Finance Minister Keat Chhon made the announcement at a meeting on Friday with special envoys of Japanese prime minister - Asean Ambassador Yoshinori Katori and Masakazu Toyoda. The dignitaries were visiting Cambodia to discuss the impacts on Asia of the world economic crisis.
Cheam Yeap, chairman of the Commission on Economy, Finance, Banking and Auditing at the National Assembly, told the Post Sunday that the lower growth outlook came after consultation with economic experts.
"I have analysed the growth for 2009 with economists, and we agree with Keat Chhon's forecast of five percent instead of the previous forecast of 6.5 percent," Cheam Yeap said.
He blamed a deepening slowdown in the garment and real estate sectors for the revised estimates, but added that strong agriculture and tourism growth could help limit the impact next year.
"Even the IMF, the World Bank and the ADB have predicted that tourism will also be affected by the crisis. I predict, as the former minister of tourism, that the sector will remain strong because of the political crisis in Thailand, which will divert tourists to Cambodia," he said.
Some 1.7 million tourists visited Cambodia between January and October this year, an increase of 8.5 percent over the same period in 2007, according to statistics from the Ministry of Tourism.
"The government's lowering of the growth rate to five percent is reasonable and probably appropriate," Chan Sophal, president of the Cambodia Economic Association, told the Post on Sunday.
"However, there will still be uncertainties, especially in the garment and real estate sectors, over the involvement of foreign investors."
He added that tourism may be slightly impacted by the crisis.
"The number of Western tourists may decline, but Asian tourists such as the Chinese, Japanese and Koreans may still spend their holidays in Cambodia."
Cambodia saw an average of 11.1 percent economic growth from 2004 to 2007, according to a World Bank report released last week.
The report added that growth would slow this year to 6.7 percent and drop to 4.9 in 2009.