10.09.201012:09:00UTC+00Cambodia To Grow Around 5% In 2010, IMF Says

Cambodia's economy may expand 4.5% to 5% this year, largely led by exports, the International Monetary Fund said Friday.

However, the fund sees significant downside risks to the country's growth prospects from fragile global recovery as Cambodia's export sector relies heavily on the U.S and European markets.

However, the lender observed that the country's export-led recovery is taking hold since the beginning of the year. Garment exports and tourist arrivals are bouncing back, while construction activity is expected to remain sluggish. Moreover, delayed monsoon may adversely affect agricultural output.

The Fund recommended strengthening of the business climate and boosting of the public sector revenue could help to overcome the downside risks. A better-than-expected return to medium-term investments in the power sector and rural infrastructure could offer significant upside potential.

The IMF mission also stressed that further consolidation for 2011 would enable Cambodia to retain its favorable debt sustainability outlook and rebuild its capacity to absorb potential future shocks.

Copyright(c) 2010 News.com, Inc. All Rights Reserved