The International Monetary Fund (IMF) on Friday said it expects Cambodia’s economy to grow by 7 percent this year, fueled mostly by the garment, tourism and construction sectors, though risks such as extreme weather and labor market instabilities could cause growth to fluctuate.
The IMF also predicted that in 2014, gross domestic product would increase to 7.25 percent.
“Economic activity remains strong, driven by robust garment exports, tourism and construction, despite a tepid global recovery. GDP growth is projected at 7 percent in 2013 due to recent floods and a temporary slowdown during the election period,” Meral Karasulu, Asia and Pacific deputy division chief at the IMF, said at a news conference.
“As global recovery continues, growth is projected to pick up 7.25 percent next year.”
Ms. Karasulu made her remarks following a 10-day visit to the country to assess Cambodia’s macroeconomic developments.
Economic growth is still subject to risks, she said.
“Extreme weather conditions, labor market instabilities, and rapid credit growth, particularly in the real estate and construction sector, pose potential risks,” Ms. Karasulu said, adding that labor market instabilities did not refer to any particular event, such as Tuesday’s fatal clashes between police and garment workers in Phnom Penh.
“We’re not referencing Tuesday’s events or any other event,” she said. “It is a stable labor market at this time.”
The IMF’s GDP prediction follows reports by the World Bank and the Asian Development Bank (ADB), which made similar growth forecasts.
The World Bank said Cambodia’s economy would grow 7 percent this year and next year, while the ADB predicted 7.2 percent for 2013 and 7.5 percent for 2014.