THE International Monetary Fund has produced its most gloomy economic outlook to date for Cambodia and predicted the country's economy will contract half a percent in 2009. It blamed Cambodia's increasing exposure to the global crisis and warned the contraction could be even worse.
The revision marks a sharp reversal from the body, which only in December forecast growth of 4.75 percent for 2009. The review follows the visit on Wednesday of an IMF mission from the organisation's US head office.
"Real GDP is now projected to fall by about [half a] percent in 2009," Friday's press statement said. "Given the rapidly evolving global situation, a larger-than-usual degree of uncertainty exists around this projection and risks remain tilted to the downside. The outlook for 2010 is also highly uncertain."
The mission concluded that the economic environment would remain "extremely challenging" into next year.
The IMF's review marks a continuing slide in GDP projections for 2009. Prior to the IMF revision, the Economist Intelligence Unit predicted 1 percent GDP growth, just a week after Prime Minister Hun Sen maintained that he expected 6 percent growth.
Chan Sophal, president of the Cambodia Economics Association, told the Post that contraction appeared realistic. "More and more information shows that Cambodia is going to be adversely affected [by the global economic crisis]," he said on Sunday. "It is reasonable [for the IMF] to revise downwards."
The IMF estimates that Cambodia achieved 6.5 percent growth last year.