Cambodia's Economic Growth remains Strong

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Despite slight decline, Cambodia's economic outlook for 2008 will remain strong overall, "Cambodian economic growth in 2008 will drop from 9.5 percent in 2007 to 7.5 percent," according to the outlook released on Thursday 15 November 2007.The decline has been caused by Cambodia's narrow base of exports which are vulnerable to outside events. The garment sector will face new competition when the protective barriers on China are halted by the end of 2008, it said.Despite the two percent decline, the World Bank (WB) specialists have shown optimism in Cambodia's economic growth for next year.
"The prospects for 2008 are positive. Although the narrow growth base has caused medium-term concerns, strong macro-economic management and progress in institutional reforms will enable Cambodia to maintain fast growth," WB senior economist in Cambodia Mr. Stephane Guimbert was quoted, "Underground resource exploitation needs careful management based on fiscal, social and environmental transparency if Cambodia is to obtain full benefits from its potential," he said.
Cambodia will be able to maintain economic growth of 7.5 percent next year because its exchange rate is stable and the foreign currency reserves will increase to 1.4 billion U.S. dollars by the end of 2007.
Meanwhile, the financial sector is growing with 23 commercial banks operating and 17 micro-finance institutes annually providing estimated credit of 50 million U.S. dollars to micro and small businesses, according to the WB report.
A number of important laws including anti-money laundering, anti-terrorist financing, non-governmental bond issuance and exchange, and bankruptcy laws have also been adopted in 2007, it added.
According to official statistics, the average economic growth rate in the past three years reached 11 percent, which showed that the kingdom enjoyed macro-economic stability under the current government.