Flood Make World Bank Downgrade Cambodia’s GDP Growth Down 0.8 Percent

Cambodia’s GDP growth has been downgraded from an estimated growth of about 6.8% to 6 % as the result of the destructive flood impact, World Bank Senior Economist Enrique Aldaz Carroll said today.

“It was down from 6.8% to 6%, because of the destructive flood impact and economic slowdown of the EU and U.S. in the second half of 2011”, he said.

The agriculture sector was previously expect to growth by nearly 4%, but is now projected to grow by 1.5% for 2011, he said.

Huot Chea, Cambodian World Bank Senior Economist said the inflation rate also pretty high comparing to the previous forecast.

The inflation rate is still under manageable but it was slightly fell from 7.1% in June; it is projected to reach 7.5% by the end of the year, he said.

However this prediction is not higher than previous one, but totally Cambodia is expected to further increase to 6.5% annually for the next two year, Enrigue Aldaz Carroll said.

According to the World Bank’s Economic review, the 6% of the growth is being driven by strong exports of goods and services, private investment, and a solid macroeconomic position.

In the first haft of 2011, the construction and real estate sector remained subdued after the experiencing negative growth last year. News approved construction projects in Phnom Penh rose by 12%. The garment exports have continued to see an impressive expansion in US. and EU markets, the report said.

The service sectors are projected well performance based on growing tourist arrivals. Foreign Direct Investment inflows are forecasted to increase by 15% this year. The growth of foreign reserve continues to pursue its ascending trend, projected to growth by 22%.

According to the report, the financial sector is recovering with a growing number of banks entering the Cambodian market.

Today there are 35 banks are operating in Cambodia up from 33 in previous year, Enrique Aldaz Carroll said.

 

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