SOARING international petroleum prices had led the Cambodian government to raise its inflation target for this year to 5.5 per cent, Economy and Finance Minister Keat Chhon said yesterday.

That is half a per cent  higher than the ministry’s previous estimate of  inflation for 2011, although economists said the expected increase in prices would be manageable.

In a speech to the National Assembly, Keat Chhon largely blamed rising petrol prices, which have climbed more than 10 per cent to US$1.38  a gallon since January.

“As the world is challenged by high unemployment and inflation rates, a small country with an open economy like Cambodia is obviously unable to escape from these impacts,” he said, speaking at a 2012 budget draft meeting with National Assembly members.

“We hope the inflation rate will decline to five per cent next year.”

The government’s estimate matches that of the Asian Development Bank, although it sits between the World Bank’s five per cent prediction and the International Monetary Fund’s 6.5 per cent.

Domestic economists surveyed yesterday praised the revision as the right move, although they disagreed on how much the Kingdom’s inflation would increase by year’s end.

Kang Chandararot, president at the Cambodian Institute for Development Study, said a weak US dollar and higher food prices had also contributed to the country’s inflat-ion woes.

Given its extensive dollar-  denominated imports, Cambodia would not escape much of the inflation caused by a lower dollar, Keat Chhon said.

But a strong crop year for the Kingdom could alleviate some of the pressure from rising food prices, he said.

“We will have increased inflation, but not so high as the IMF predicted.”

Kang Chandararot called for strong agriculture and trade policies to help fight rising prices, including greater incentives for the Kingdom’s farmers to increase production.

But Cambodian Economic Association president Chan Sophal said he expected further price increases for the rest of the year, pointing to fuel and food as the main causes.

The prices of some meat and fish products had jumped 50 per cent in the past three months, and as a result the inflation rate would be closer to the IMF’s anticipated 6.5 per cent, Chan Sophal said.

“Inflation this year is very likely to be higher than expected,” he said.

Chan Sophal warned against exaggerating the importance of the government’s revision, however, calling the ministry’s half-point increase a natural mid-year change based on developments seen over the first six months.

He said he agreed with the government’s upward revision of gross domestic product to 6.1 per cent yesterday.