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IMF Estimates 5 Percent Growth in 2010

The International Monetary Fund predicts an economic growth rate as high as 5 percent for 2010, thanks to recovery in garment exports and tourism.

The IMF said 2009 had seen a shrinking of the economy by 2 percent in the wake of the global economic crisis, but there are signs of growth, especially in the two chief earners.

“Real GDP growth is projected to reach 4.5 to 5 percent in 2010, a significant turnaround from 2009,” the IMF’s senior economist for Asia and the Pacific, Olaf Underoberdoerster, told reporters Friday following a 10-day mission. “A broadening export-led recovery has taken hold since the beginning of the year.”

Some economic cool spots remain. Construction activity remained “sluggish,” Underoberdoerster said, with related imports low, “while a late start of the rainy season may dent agricultural output growth.”

Still, Cambodia’s economy could grow even further into 2011 and 2012, he said.

Cambodia will also benefit from an increase in the labor force and a relatively young population, but it will have to improve its business environment to make it more competitive, he said.

Cambodia should also focus on improving public service delivery and ensure public investment was targeted at areas for “high return in key infrastructure and social priority sectors,” he said.

Underoberdoerster also stressed the promotion of agriculture and rural infrastructure as means to broaden future growth.

“Improving the quality and dissemination of key economic statistics will serve to further enhance policy credibility and result in better informed business decisions,” he said.

Meanwhile, Yim Sovann, a spokesman for the opposition Sam Rainsy Party, said 5 percent growth was not enough when put against the population growth rate and inflation.

Improvements need to be made in the fight against corruption and the distribution of economic wealth “for all, with equity,” he said.