Phnom Penh - The International Monetary Fund (IMF) praised
Cambodia's macroeconomic policies Tuesday, saying positive economic
growth should continue but warning that China and Vietnam could pose
increasing competition to its narrowly based economy.
An IMF delegation from Washington ended a two-week high-level
visit to the country Tuesday with a rosy overall impression of the
national economy, IMF Asia Pacific advisor Jeremy Carter told a press
conference.
However looming competitive pressures on the vital garment sector
due to a lifting of safeguards on China's garment industry at the end
of next year, competition in the same area from neighbouring Vietnam
following its World Trade Organisation accession and the danger of
poor weather affecting the agriculturally dependent nation still
loomed as risks, the IMF said in a statement.
'Prudent macroeconomic policy implementation has provided
stability, in turn boosting investors' and consumers' confidence, and
has underpinned very strong macroeconomic performance,' the statement
said.
'Impressive rates of growth have been sustained, inflation remains
low, external debt is sustainable and headway is being made in a
number of important structural reforms.
'The mission noted that the environment provides ideal conditions
to re-energise reforms in key areas where progress has been less
rapid, and to address the key constraints to broader poverty
reduction.'
It said these factors had encouraged significantly increasing
Foreign Direct Investment (FDI) which augured well for the economy.
The IMF said it estimates real Gross Domestic Product (GDP) to
increase by around nine-per-cent this year, fanned by increased
agricultural production and 'robust growth' in the areas of tourism,
garment export and construction.
'Services, in particular finance and telecommunications, are
increasingly contributing,' it added.
However the domestic growth in the key industries which form the
narrow pedestal of the country's economy - garments, construction,
agriculture and tourism - were also subject to fluctuation due to
international trends and environmental factors beyond the control of
the government, it warned.
International oil price hikes had also had an influence, with
inflation recently ticking up to 4 per cent, the IMF statement
said, but assuming broadly stable international oil prices for the
rest of 2007 it said it expected this rate to remain in the low
single digits.
Carter told journalists the IMF expected oil revenues to prove a
positive. These may begin trickling into the economy as early as 2009
when drilling begins on promising offshore oil and natural gas
fields.
The IMF team met with a range of government officials during its
visit, including Prime Minister Hun Sen and senior ministers and
officials, as well as non-government representatives and union
representatives.
The IMF provides technical assistance to Cambodia and has focused
much of its work on reforming the rapidly developing country's
banking and finance sectors.
© 2007 dpa - Deutsche Presse-Agentur 
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