IMF Expects Cambodian Economy To Contract 2.75% This Year

by RTT Staff Writer

TOP MARKET NEWS

(RTTNews) - The International Monetary Fund in a report on the Cambodian economy said the global economy is having a larger impact on the economy than previously expected. It therefore expects the real GDP to decline 2.75% this year.

In its annual Article IV report, the IMF said Cambodia's garment export volume could fall 15% this year, due to lower consumption in the U.S. The U.S is Cambodia's key garment export market. Moreover, tourism was drastically affected by the slump in its tourist-source countries, and construction sector was also badly affected by falling property prices, the IMF said.
Looking ahead, in 2010, the global lender said there were some hopeful signs that the global downturn may be bottoming out. An expected global recovery is likely to lead to a modest growth of 4.25% for the country in 2010, although downside risks remained to the growth, the lender said.

Inflation pressures eased, owing to lower domestic demand and commodity prices, and is expected to come in at 5.25% by the year end, the IMF noted. "Inflation should remain in the mid-single digits through 2010. However, vigilance is required to ensure that fiscal stimulus does not lead to renewed inflation pressures", it added.