PHNOM PENH, July 4 (Xinhua) -- Cambodia's economic growth is expected to remain stable in 2017 and inflation will pick up due to increases in fuel and food prices, the Singapore-based ASEAN+3 Macroeconomic Research Office (AMRO) said in a press release on Tuesday.
The press release was issued after AMRO lead specialist Seung Hyun Hong, along with AMRO director Junhong Chang and AMRO chief economist Hoe Ee Khor, made an annual consultation visit to Cambodia late last month.
During the visit, they met with Cambodian Economy and Finance Minister Aun Pornmoniroth and National Bank of Cambodia deputy governor Neav Chanthana, the release said, adding that discussions focused on assessing near-term growth prospect and financial stability, policy development, and efforts on promoting industrial diversification.
"Cambodia's economy is expected to grow strongly at 6.9 percent in 2017 with inflation reaching around 4 percent," Seung Hyun Hong said in the press release.
"Despite sustained growth in the garment, construction, and tourism sectors, headwinds to growth emanate from rising labor cost and ongoing adjustments in the real estate sector," he said.
To mitigate the adverse effect of labor cost increases on competitiveness, further efforts are needed in several areas, such as enhancing labor quality, improving trade facilitation, and reducing logistics and electricity costs, the release said.
As manufacturing industry started to show early signs of diversification, broadening economic base is essential for long-term sustained growth, it added.
With monetary policy constrained by dollarization, a comprehensive framework of prudential policies should be adopted to manage risks in the financial system and enhance financial stability, the release said.
Established under the agreement signed by the ASEAN+3 finance ministers and central bank governors in 2009, AMRO aims at contributing to securing the economic and financial stability of the ASEAN+3 region, which include 10 ASEAN countries and China, Japan, and South Korea.