ADB raises Cambodia's growth forecast to 6.8pc

PHNOM PENH: The Asian Development Bank (ADB) said Wednesday that Cambodia's economy would grow 6.8 per cent this year, slightly up from its April projection of 6.5 per cent.

The bank's senior country economist Peter Brimble credited the rise to a 23-per-cent jump in the value of garment exports to the United States in the first six months of the year.

He also credited "tourism increasing by about 13 per cent in arrivals over the first six months, and some good signs on rice exports and in general agricultural production" with contributing to the improved forecast.

"However the current slowdown in global trade is likely to temper growth momentum in 2012."

Economists have long said Cambodia must diversify into key sectors such as agriculture and tourism. Brimble said there were signs that was happening, adding that the ADB would help the country to meet those goals over the next two years.

But he warned that high electricity prices and graft would remain key concerns for investors.

The ADB said Cambodia should also boost connectivity through its southern corridor linking Vietnam and Thailand, and cut transport costs and unnecessary delays.

"If we can do that, I am pretty sure more companies are going to look at Cambodia," Brimble said.

The ADB said Cambodia's economy would grow 6.5 per cent next year. It predicted inflation of 5.5 per cent in 2011 and 4.6 per cent next year, provided oil prices remain constant.

The bank said there was no new data on Cambodia's poverty rate, which was measured at 30.1 per cent in 2007.

Brimble said "we would expect that in terms of the (economic) crisis in 2009 there would be an increase."

Cambodia experienced an average annual economic growth of 9.1 per cent in the decade to 2008.

Copyright dpa (Deutsche Presse-Agentur Gmbh), 2011