Minister of Finance says Cambodia dodged recession in 2009
MINISTER of Economy and Finance Keat Chhon led Cambodian economists Wednesday in saying the country avoided recession last year despite unanimous projections by international analysts of negative growth for 2009.
The initial government GDP forecast for 2009 was later revised downwards from 6 percent GDP growth to 2 percent, and Keat Chhon said Wednesday that the Kingdom had seen its economy grow in the past year from US$11.1 billion in 2008.
Speaking Wednesday at a workshop on arms smuggling in Phnom Penh, Keat Chhon would not confirm the expected level of growth for last year, nor when it would be published – only that the National Institute of Statistics was still calculating the final figure.
“It is being upgraded now,” he said.
In contrast to the government’s positive outlook on last year’s economic performance – when the Kingdom was hit by the global economic crisis – the World Bank’s latest projection was for a 2.2 percent contraction, the International Monetary Fund (IMF) minus 2.75 and the Asia Development Bank (ADB) minus 1.5.
“I think the IMF, World Bank and ADB should revise their predictions,” said Kang Chandararoth, an independent economist and president of the Cambodia Institute for Development Study, acknowledging the 15.8 percent decline in garment and apparel shipments last year.
“I agree with the government’s projection that it is positive – it is right,” he said.
The tourism sector expanded slightly, he said, and agriculture showed a strong performance and lifted the entire economy in 2009.
The IMF projects that agriculture expanded more than 4 percent in 2009
The government doubled public spending last year, he added, projecting GDP growth of between 2.5 percent and 3 percent.
All of Cambodia’s key sectors except agriculture contracted last year as many people lost their jobs in the city and returned to the provinces to work on family land, he said.
The garment sector alone recorded a net loss of about 30,000 jobs last year, according to Ministry of Labour figures released Tuesday.
Exports fell 18.2 percent last year, outstripping the 15.83 percent fall in shipments of garments, the Kingdom’s main export industry, and imports slumped 17 percent.
Although total arrivals to the Kingdom rose 1.7 percent in 2009, according to Ministry of Tourism figures, air arrivals, which are considered to spend the most money when visiting, dropped 10.3 percent.