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Kingdom’s economy insulated: officials

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Vongsey Visoth, Secretary of State of the Ministry of Economy and Finance holds a meeting announcing the Budget for 2017 yesterday in Phnom Penh. Hong Menea

Kingdom’s economy insulated: officials

Speakers at a government forum held yesterday on macroeconomic management and the 2017 budget law said Cambodia’s strong economic growth has been largely unscathed by China’s slowdown, though clouds were forming on the horizon.

Vongsey Vissoth, secretary of state at the Ministry of Economy and Finance (MEF), said Cambodia could expect to continue on course at around 7 percent gross domestic product (GDP) growth in 2017 despite uncertainty over the health of the global economy. He said the Kingdom’s economy has been a bright spot in the world economy, weathering the effects of China’s slowdown and other external pressures.

“Our priority at this time is to maintain a growth rate of 7 percent as long as possible and distribute the achievements of the economy to all the people that benefit from it,” he said.

According to MEF projections released yesterday, Cambodia’s GDP will reach $22.3 billion this year, with the agricultural sector increasing by nearly 2 percent while the industrial sector is pegged to expand by an impressive 10.7 percent. The service sector is predicted to enlarge by 6.3 percent.

Despite the optimistic forecast, concerns were raised at the forum about the slower growth of China’s economy, US dollar appreciation, the increasing price of oil and the United Kingdom’s intention to leave the European Union.

“Slower growth of the Chinese economy could affect Cambodia’s economy especially in the trade and financial sectors,” said Chheang Vanarith, director of the macroeconomic and fiscal policy department at the MEF. “The increasing price of oil will affect the cost of goods in the market because Cambodia has to import all of its oil.”

The forum comes a day after the National Bank of Cambodia released its annual report, which reported a surge in foreign direct investment (FDI) despite a feared slowdown in investment from China.

Total capital inflows of FDI topped $2.15 billion in 2016, a 25 percent increase over the previous year, according to the report.

China remained Cambodia’s largest source of FDI last year, contributing $511 million, with another $237 million coming from Hong Kong.

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