Saturday, 7 March 2009

Low garment sales, poor tourism to hit Cambodia-IMF

Reuters - Saturday, March 7

PHNOM PENH, March 6 - A slowdown in garment exports and a drop in the number of tourists could cause Cambodia's economy to shrink 0.5 percent this year, the International Monetary Fund said on Friday.

That is a big turnaround from the 4.8 percent growth the IMF had forecast in November.

"Garment exports are under pressure due to sharply lower retail demand in the United States and European Union," it said in a statement after an IMF team ended a mission to the Southeast Asian country. Garments are Cambodia's biggest export earner.

Construction activity and foreign investment were also slow as external investors cut back, the IMF said said.

The World Bank projected foreign direct investment of around $800 million in 2008 and has said it could fall "probably to below $600 million" in 2009.

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