For the first time in recent memory, the Ministry of Economy and Finance has released growth projections for the first half of the year, and the numbers are good.
Some say too good.
The ministry’s preliminary data claims that from January through June, economic growth stood at 7.6 per cent, an announcement that critics are questioning not only for accuracy but for timing.
The national election is days away, and positive statistics would reflect back on the ruling Cambodian People’s Party, which is facing an increasingly vigorous challenge from the opposition Cambodia National Rescue Party.
Kang Chandararot, president of the Cambodian Institute for Development Study, expressed doubt about the findings.
“I was surprised with the projection because this is the first-ever report that [the government] released for the first half of the year. They never release it,” he said. He added, “I am really sceptical with the figure because, based on some indicators, I don’t see any strong sectors” that can be accelerators for the growth.
According to the report, the agricultural sector grew by 4.2 per cent; the industrial sector went up by 9.3 per cent; and the garment sector rose by 7 per cent. Construction, the financial sector, and hotel and restaurant services also contributed to the growth.
“I see the demand side is not strong in the export markets,” Chandararot continued. “As far as I know, the flow of foreign direct investment in this period also dropped, so it’s likely garment exports, which dominate our export sector, went up very little.
“The figure requires all other sectors to have accelerated more than 7.6 per cent.”
Cambodia’s GDP expanded 7.3 per cent last year. The Asian Development Bank in April projected that Cambodia’s economy would grow 7.2 per cent in 2013, picking up to 7.5 per cent next year along with recovery in Europe and the United States.
Son Chhay, a Cambodia National Rescue Party candidate, said that the announcement was nothing more than a public relations move ahead of the election.
“Well, I don’t think the growth projection is good for our people and investors now, so what the people want to see is their actual performance.”
Officials at the Ministry of Finance could not be reached yesterday.
Taking an altogether different view, Grant Knuckey, chief executive of ANZ Royal Bank, said that projection is heartening.
“Domestic growth was also evident through higher trading volumes for consumer goods in particular,” Knuckey said. “My view is that the weak economic outlook for Europe is not a particularly significant issue for Cambodia’s growth.”