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ADB trims Cambodia growth forecasts
Publication Date : 04-10-2012
The Asian Development Bank (ADB) says it has reduced its growth forecasts to reflect depressed demand for Cambodian products arising from the slump in global markets.
"Falling global demand, especially in Europe and the US, means that the industry sector will grow at a slower pace this year," said Peter Brimble, senior country economist for Cambodia.
"However, buoyancy in the services sector, particularly tourism, offsets to some extent the slowdown in garment exports," he said.
According to the update to the annual Asian Development Outlook released yesterday, Cambodia’s gross domestic product is forecast to grow by 6.4 per cent in 2012, down from an earlier forecast of 6.5 per cent.
In 2013, growth is now projected at 6.8 per cent, down from 7.0 per cent forecast earlier.
In a statement, the ADB said demand for garments and footwear had softened with US imports growing by only 2.6 per cent to US$1.5 billion in the first seven months of 2012. EU imports rose 20.9 per cent to $798 million in the first six months. Both decelerated sharply over 2011 levels.
While dry weather has hurt agricultural production in some provinces, other sectors have been performing well including transport, finance, construction and tourism.
Approved investment in construction jumped by almost 85 per cent to $1.4 billion in the first seven months of the year. And tourist arrivals jumped by 27 per cent to 1.8 million by mid-year.
"The current account deficit is expected to widen more than previously anticipated, in light of upward revision of the 2011 current account gap and the weaker export outlook," the statement said. The deficit is estimated at 9.8 per cent this year and 9.7 per cent next year.
With more moderate price increases for food and fuel, inflation forecasts are lower at 3.0 per cent for this year and 4.5 per cent next year.
The ADB noted that Cambodia's gross official reserves rose by 6.6 per cent to $3.2 billion in the first half of 2012, covering 4.3 months of imports of goods and services.