World Bank Forecasts More Growth in 2010

Wednesday, 07 April 2010

Chun Sakada, VOA Khmer | Original report from Phnom Penh

The World Bank said Wednesday that Cambodia’s economy is expected to grow around 4.4 percent this year, signaling a recovery from the economic crisis and a recession in 2009.

A World Bank economist told VOA Khmer Wednesday that growth could climb as high as 6 percent in 2011, a rate that would be close to the galloping growth the country experienced in the years preceding the global downturn.

“Recorded agri-business exports more than doubled, especially in milled rice and rubber exports, year-on-year air tourist arrivals stopped declining, imports of consumer goods stabilized, and both domestic credit and inflows of foreign direct investment began rebounding,” the World Bank said in a statement Wednesday.

Cambodia’s economy contracted 2 percent in 2009, driven by poor exports of garments, less tourism and a 35 percent drop in foreign direct investment, the World Bank said.

Chea Hout, a Cambodian economist for World Bank, said Cambodia still had a high amount of its exports—60 percent—destined for the US, while a full two-third of its imports came from China, Singapore, Vietnam and Thailand.

“Cambodia’s economy is still very narrow,” he said. “So it can be highly vulnerable to the external environment.”

A diversified economy and structural and institutional reform would improve the investment climate, he said, which would in turn help Cambodia compete with other countries to reach the international market.

The World Bank suggested the region’s middle-income countries, including Vietnam and Thailand, invest in physical and human capital to move up the value chain, while low-income countries like Cambodia should focus on manufacturing and on becoming a part of global and regional production networks.

Sang Sinavith, a customs official, told reporters Wednesday Cambodia had exported $3.9 billion in goods in 2009, but he expected exports totaling more than $4.1 billion this year.

However, the country is still running a trade deficit, having imported $5.45 billion in goods in 2009 and potentially $6.38 billion in 2010, he said.