Friday, 10 October 2008

Standard and Poor's assesses Cambodian economic outlook as stable

Monsters and Critics
Oct 9, 2008

Phnom Penh - Standard and Poor's declared the Cambodian economic outlook stable Thursday in an overall positive assessment in a sovereign report covering 21 Asia-Pacific nations.

The report, sub-titled As the Financial Storm Spreads, Major Uncertainties Loom, praised the government's economic strategies.

It noted that despite the fact corruption and a dependence on donors remained concerns, it considered the Cambodian People's Party national election win in July with an increased majority meant 'no change in its pragmatic and market-friendly direction was expected.'

However, the strong showing of the main opposition party, the Sam Rainsy Party, at the polls, grabbing 22 per cent of the vote, meant despite its dominance the ruling party remained accountable to voters and augured well for the democratic process, it added.

The global financial services and credit rating company awarded Cambodia its first sovereign debt rating of B-plus in 2007.

The B-plus rating is below investment grade status, restricting many institutional investors. However, Cambodia has since risen above nations such as Pakistan.

Standard and Poor's Thursday assessed Cambodia's outlook stable and said although 'inflationary pressures remain acute ... fiscal policy remains one of the credit strengths for Cambodia.'

Cambodia is expected to maintain real GDP growth of around 7 per cent into next year, according to the International Monetary Fund.

The report comes ahead of an IMF meeting in Washington October 10-13 which will gather the world's central bankers and finance ministers to discuss a global response to the world's financial crisis.

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