ADB retains Cambodia's growth at 7 pct this year as political uncertainties ease

PHNOM PENH, Sept. 25 (Xinhua) -- The Asian Development Bank ( ADB) maintained its April projection for Cambodia's economic growth at 7 percent in 2014 after political crisis over last year' s election ended last month, said a new report released on Thursday.

"This favorable outlook is supported by the recent easing of political uncertainty that followed last year's elections and labor tensions in the garment industry after the minimum monthly wage for garment workers was raised in February this year," said the ADB Outlook Update 2014.

Cambodia's economy mainly depends on garment export, agriculture, tourism and construction.

The report said the exports of garments and footwear increased by 14.5 percent to 2.8 billion U.S. dollars in the first half of 2014, compared with a 17 percent gain during the same period last year.

The nation received over 2.2 million foreign tourists in the first six months of 2014, an increase of 6 percent year on year, while the construction sector attracted a total investment of 1.54 billion U.S. dollars in the first five months of this year, a hefty 210 percent rise.

"Cambodia's economy is expected to remain in good shape over the next two years, reflecting increased political stability and steady macroeconomic management that should further lift investors ' confidence," said Jan Hansen, ADB Senior Country Economist for Cambodia.

The report said inflation is expected at 4.4 percent in 2014, driven by higher food prices and a tightening of customs duty collections in late 2013 that put some upward pressure on prices of imports.

ADB's growth projection for Cambodia is lower than the government's forecast.

Last month, Prime Minister Hun Sen predicted that the country's economy was expected to grow by 7.5 percent in 2014, driven by steady growth in garment export, agriculture, tourism and construction.

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