IMF predicts hard landing for Cambodian economy

PHNOM PENH, Cambodia's economy will come under intense pressure in 2009 as tourism, garments and construction take a hit from the global economic slowdown, according to the International Monetary Fund (IMF).

"Cambodia's exceptional growth performance... is coming under increasing strain from the global economic crisis and weakening external demand," English-language daily newspaper the Phnom Penh Post on Thursday quoted an IMF report as saying.

Foreign direct investment will decline and foreign reserves could fall to about 1.9 billion U.S. dollars, it said.

"Cambodia could experience a pronounced liquidity contraction and possible large reserve loss," it said.

Meanwhile, the report predicted 4.8 percent economic growth for Cambodia in 2009, but IMF Resident Representative John Nelmes warned that the projection will be downgraded.

"We are taking a close look at the growth projection... Since November, when the projection was made, the global crisis has intensified," he told the newspaper.

The World Bank has forecast 4.9 percent Gross Domestic Products(GDP) growth for Cambodia this year, while the Economist Conference, which belongs to the same company that publishes The Economist magazine, even said that it will nose-dive to 1 percent.