The government is predicting Cambodia’s gross domestic product will grow at seven percent this year and next.
A Finance Ministry report published last week said there will be solid growth in garment exports, manufacturing and the services industry, alongside modest developments in agriculture. The real estate sector will meanwhile slow down.
The government’s growth forecast stands at seven percent for this year and next, while the Asia Development Bank and World Bank’s forecast is 7.1 percent for this year and 6.9 percent for next.
The report said the industrial sector is expected to grow by 10.66 percent this year and 10.11 percent next year. It put this down to the upcoming commune elections, which could make investors reluctant to invest in new projects.
At the same time, the report said, Cambodia could experience a knock-on effect due to the slowdown in the economies of its trading partners.
The service sector is predicted to grow at 6.53 percent this year and 6.66 percent in 2018. There will be a slowdown in real estate, but the overall service sector will be buoyed up by strong growth in wholesale and retail operations, the report said.
The agriculture sector will grow 1.96 percent this year and 1.99 percent next year, due to favourable weather conditions and increased government support, it added.
Vongsey Vissoth, secretary of state at the Finance Ministry, said Cambodia would continue to experience stable growth despite challenges posed by internal and external issues.
Mr Vissoth added that the industrial sector had been boosted by improvements in food and beverage, electric component and furniture manufacturing.
“Cambodia’s macroeconomic framework remains stable while inflation will be around 3.5 percent this year and 3.8 percent in 2018,” Mr. Vissoth said.
“Gas and food prices are rising a bit, but the ministry is studying the increase and will protect the living standards of people on low incomes.”
Chou Ngeth, a senior consultant at Emerging Markets Consulting, told Khmer Times the Cambodian government should focus on agro-industry processing to push the growth of economy.
He said this would add more value to the sector, generate jobs for Cambodians and increase price stability for farmers.
“The government should diversify agro-industry processing and build closer relationships with countries that import garments from Cambodia, especially the United States,” Mr Ngeth said.
Mey Kalyan, senior advisor to the government’s Supreme Economic Council, told Khmer Times that seven percent growth is enough, but it must be maintained year-on-year.
The bigger the economy, the smaller the growth will be in future, he added.
“It is appropriate for Cambodia’s GDP to grow by seven percent,” he said. “I believe the Finance Ministry’s prediction because they have experts measuring our macroeconomics.”
Mr Kalyan recommended Cambodia expand initiatives to add value to the industrial and agricultural sectors. He said that quality electricity supply and technical experts were a prerequisite for diversification in both sectors.
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