Logo of Phnom Penh Post newspaper Phnom Penh Post - Growth but not without risks: IMF

Growth but not without risks: IMF

Growth but not without risks: IMF

Despite forecasting strong growth for Cambodia this year, the International Monetary Fund warned of risks posed to the country’s economy by the anticipated winding down of the US Federal Reserve's quantitative easing.

Speaking at a conference in Phnom Penh on Friday, Meral Karasulu, deputy division chief at the Asia and Pacific Department of the IMF, said the potential slowdown of “unconventional monetary policy” in the US – effectively injecting money in to the world economy – could have “significant spillovers” across the region.

“Not withstanding robust growth, the economic outlook is subject to downside risks,” said Karasulu, adding that tightening global liquidity could impact foreign investment, tourism and international banking flows.

Nevertheless, the IMF expects Cambodia’s economy to grow by 7 per cent this year, upgraded from the 6.7 per cent it projected in April this year.

The Federal Reserve hinted in June that it would look to taper its policy of cash fuelling this year. And though it is yet to occur, speculation alone has sent ripples throughout the world economy as economists and markets anticipate a decline.

“I think it will somehow impact [Cambodia], but it is very small,” said Mey Kalyan, an adviser to the Supreme National Economic Council.

Kalyan said most of the impacts would be felt in countries with greater short-term investment options.

Given Cambodia’s nascent securities market, most investments are long-term, and therefore the economy was less vulnerable he said.

MOST VIEWED

  • US think tank warns of China's 'ulterior motives'

    A US think tank on Tuesday warned that spreading Chinese investment in the Indo-Pacific follows a pattern of leveraging geopolitical influence at the expense of the nations receiving investment, including Cambodia. The report looks at a sample of 15 Chinese port development projects, noting that the

  • Defence Ministry denies weapons in smuggling case came from Cambodia

    After a Thai national was arrested last week for allegedly smuggling guns from Cambodia to Thailand, Cambodia's Defence Ministry has claimed the weapons seized during the arrest are not used in Cambodia, despite the fact that both types of rifle seized are commonly found in

  • More than three tonnes of ivory reportedly bound for Cambodia seized in Mozambique

    A total of 3.5 tonnes of ivory reportedly bound for Cambodia was seized by authorities in Mozambique late last week, according to the NGO Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES). CITES' information was based on a report from the

  • Shipwreck found off coast of Koh Kong

    Royal Cambodian Navy researchers are working to identify a decades-old shipwreck found earlier this month off the coast of Koh Kong province. Divers found the 70-metre-long wreck on April 4 about a mile from Koh Chhlam island, according to Navy officials. Deputy Navy Commander Tea Sokha,