Cambodia economy to grow up to 5% in 2010: IMF

A Cambodian farmer ploughs a rice field using oxen in Kampong Speu province

via CAAI

PHNOM PENH — A strong recovery in tourism and the key garment industry helped Cambodia's economy perform a "significant turnaround" this year, with projected growth of up to five percent, the IMF said Friday.

Cambodia, which saw its major industries hit by the global financial crisis, is expected to experience a 4.5 to five percent economic expansion this year and six percent growth in 2011, the International Monetary Fund said.

Garment exports and tourism are at the forefront of the rebound, with 10 to 20 percent growth in the second quarter, according to Olaf Unteroberdoerster, senior economist at the IMF's Asia Pacific department.

"Real GDP (gross domestic product) growth is projected to reach 4.5 to 5 percent in 2010, a significant turnaround from 2009," he said.

Agriculture was said to be another factor behind the forecast expansion in output, and Unteroberdoerster urged development in the sector as well as rural infrastructure investment to help broaden Cambodia's sources of growth.

But construction activity, another factor behind the country's double-digit growth before the global downturn, appears to have remained sluggish, he said.

Since the beginning of the financial crisis in 2008, Cambodia's government has issued more optimistic economic projections than international financial organisations.

While the IMF estimated Cambodia's economy would contract around 2 percent in 2009, the government forecast 0.1 percent growth. The official rate has not been released.

Cambodia used garment exports and tourism to help improve its fortunes after the 1975-79 Khmer Rouge regime and several decades of civil war left its economy and infrastructure in tatters.

Garment exports were hit by a drop in world demand caused by the financial crisis, but Ministry of Commerce figures showed exports increased by over 13 percent in the first seven months of the year.

In the first half of 2010 a total of 1.2 million foreign tourists visited Cambodia, up from 1.1 million in the same period the year before.