Cambodian economy robust, rapid credit growth slows - ministry

Aug 30 Cambodia's economy should grow about 7 percent this year and next, the Ministry of Economy and Finance said on Tuesday, adding that rapid real estate credit growth is slowing which would reduce a risk for the economy. "Cambodia's economic outlook remains robust," the ministry said in a mid-year assessment. Growth last year was about 6.9 percent, it said.

The worst drought in 50 years had affected agriculture but growth was driven by other sectors, helping the country avoid a slowdown last year, it said. The International Monetary Fund (IMF) also projected in July that Cambodia would grow by 7 percent this year. But the IMF also warned that credit growth, at an average of 30 percent year-on-year, and increasingly concentrated in the real estate sector, put growth at risk.

The IMF said the real estate sector was on a dangerous trajectory and needed to cool. The ministry said that the central bank, the National Bank of Cambodia, had implemented measures and credit growth had slowed from 34 percent in 2014 to 30 percent in 2015. This year, credit growth would slow to about 22 percent, it said. "While these are welcoming trends, policy makers need to be vigilant in closely monitoring the country's real estate market," the ministry said in its report.

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