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Growing Economy at a ‘Crossroads’: ADB

The Bank estimated Cambodia’s gross domestic product would grow 6.5 percent in 2011 and 6.8 perecent in 2012,

The Asian Development Bank said Wednesday Cambodia’s economic growth in coming years will reach up to 6.7 percent, driven by recovery in key sectors following the 2008 economic crisis.

Peter Brimble, a senior economist for the Bank, said growth in 2010 showed Cambodia on a strong footing. But he warned the country is now at a “crossroads,” with economic drivers showing a lot of potential.

“The pressure is now on to intensify efforts at meeting the longstanding challenges of accelerating economic diversification and improving the general investment climate,” Brimble said in a statement.

Poulang Doung, an economist for the Bank, said Wednesday that the country’s growth derived from recovery in clothing exports and tourism that had flagged in 2009, as well as growth in agriculture.

“We think that Cambodian recovery is firming up, but the country remains heavily dependent on a few sources of driver growth that includes the agri-sector, garment, tourism, construction and real estate,” he said.

Cambodia’s economy still relies on the US and EU markets, especially for its garment exports, he said.

Garment export to the US grew from about $1.9 billion in 2009 to $2.2 billion in 2010, according the US Department of Commerce.

Tourist arrivals, meanwhile, climbed from 2.2 million to 2.5 million during the same period, bringing in a total revenue of $1.8 billion in 2010, Poulang Doung said. The agricultural sector grew by about 4.2 percent in 2010, thanks in part to an increase in rice production.

The Bank estimated Cambodia’s gross domestic product would grow 6.5 percent in 2011 and 6.8 percent in 2012, up from a growth rate of 6.3 percent last year.

Chan Sophal, an economist and president of the Cambodia Economic Association, said he expected growth over the next two years to reach up to 8 percent, thanks to strong improvements in many sections of the economy.

The country cannot depend only on rice, garments, tourism, construction and real estate, he said, but must invest in the production of vegetables and fruit, cattle, pork, poultry, and the production of consumer goods, like sugar or furniture.