Finance Minister Criticizes Growth Predictions

Finance Minister Keat Chhon on Wednesday criticized the dour economic predictions by the Asian Development Bank and Interna-tional Monetary Fund for the country’s growth this year, referring to both as “fortune-tellers.”

The ADB on Tuesday released a prediction of 2.5 percent GDP growth for 2009, whereas the IMF in early March predicted recession and minus 0.5 percent growth this year.

“It is difficult [to predict]. People now have acted as fortune-tellers,” said Keat Chhon at the National Assembly, referring to international financial organizations’ predictions.

“We believe that our economic growth will be higher [than both] because we have the right policies at the moment,” the minister continued. “The ADB and IMF are pessimistic. They have not looked at all the corners of our country’s economy,” he said, noting that the growth estimates did not consider the informal economy, which comprises 13.8 percent of the economy.

Keat Chhon said that though growth will be higher than the 2.5 percent ADB figure, it won’t meet the government’s estimate of 6.5 percent growth.

Explaining the basis for its prediction, ADB Country Economist Eric Sidgwick said Tuesday that the tourism sector will likely shrink by 2 percent, the construction sector by 1.5 percent, and the garment sector by 5 percent, though agriculture will grow by 5 or 6 percent.

“We have released our projections and their underlying rationale, and the government is perfectly entitled to comment,” Sidg-wick wrote in an e-mail Wednes-day after being asked for comment on Keat Chhon’s statement.

Kang Chandararot, executive director of the Cambodia Institute of Development Study, also said Wednesday that he felt the gloo-my GDP predictions were overly pessimistic and were putting too much emphasis on external de-mand for Cambodian goods.

Cambodia produces a lot of low-cost goods, and the country will re-main attractive to international buyers compared to countries that produce expensive items, he said.

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