Today Online
Feb 24, 2012
SINGAPORE - Cambodia's central bank expects economic growth in 2012 to accelerate to its fastest pace in four years, led by new investments in agriculture and banking.
"One of the priority sectors of the government is to develop agriculture. At the moment growth is driven by the garment sector, tourism sector and construction. Cambodia is an agriculture land so we need to develop based on our natural resources," National Bank of Cambodia director-general Nguon Sokha told MediaCorp.
Garment-making has been a mainstay of Cambodia's economy, which has grown by between 6 and 7 per cent annually over the past four years. Now, the government is turning its focus back to the land in the hope that rice growing and other farming produce will lift growth closer to 8 per cent, making it among the world's fastest-growing economies.
While ASEAN economies are expected to grow by about 5.5 per cent this year, the Asian Development Bank (ADB) has projected that Cambodia's gross domestic product may expand by 6.5 per cent this year.
Another potential growth industry is finance. Cambodia has relatively liberal foreign ownership rules compared to its neighbours, and Mrs Nguon said there has been a lot more interest from foreign investors keen to enter the banking industry, given the country's good economic potential, macro-economic stability, political stability.
With more foreign direct investment flowing into the region, the ADB says emerging markets should also leverage off China's increasing presence in the region and make better use of the regional connectivity, in order to fully realise their growth potential.
At the moment, more than 50 per cent of Cambodia's foreign direct investment comes from China, but there are also issues that must be addressed.
Among those include "significant infrastructure deficiency in both physical and soft infrastructure", said ADB's assistant chief economist Cyn-Young Park.
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