IMF says Cambodian economy to grow 6.5 per cent, but warns of risks
Cambodia’s economy is expected to grow 6.5 per cent in 2012, up from 5.75 per cent last year, the International Monetary Fund said in its annual review, adding that government policies to boost the investment climate were paying off. However, in its assessment, which was released overnight, the US-based body warned the kingdom’s economy was vulnerable to the global slowdown, adding that its narrow export base made it susceptible to ‘significant downside risks.’ Cambodia’s economy is based on agriculture, garment manufacturing, tourism and construction, with the last three helping to buoy the economy last year. The garment industry was the largest foreign exchange earner in 2011 worth 3.75 billion dollars in exports. ‘If you look at the report there has been quite a bit of progress on several fronts and that progress needs to be continued,’ IMF country director Faisal Ahmed told DPA Tuesday, adding that one key area needing attention was the financial sector. The IMF assessment called again for a moratorium on banking licences – more than 30 banks now operate in Cambodia, making it ‘overbanked’ – until the central bank has sufficient capacity to regulate the sector.
