PHNOM PENH (Reuters) - Cambodia's economy is forecast to grow 6.9 percent next year, compared with a projected 6.8 percent pace in 2017, despite risks including uncertainties over next year's election, the World Bank said on Wednesday.
Cambodia's political turbulence has had little impact on economic growth, which has hovered around 7 percent for the past six years.
The World Bank said textile exports had moderated and the construction sector showed signs of slowing, but other manufacturing exports had increased and Cambodia was also drawing more tourists - particularly from China.
"The outlook remains positive," it said in a report.
"A possible slowdown of the regional economy, especially China, and potential election related uncertainties, however, pose downside risks to the outlook."
China is now Cambodia's biggest aid donor and investor, but Western donors remain important and Cambodia has been increasingly at odds with them in the run-up to the 2018 election.
They have condemned the arrest of Prime Minister Hun Sen's main rival, Kem Sokha, the dissolution of the main opposition Cambodia National Rescue Party (CNRP) and a crackdown on civil rights groups and independent media.
The government accuses Kem Sokha of plotting to take power with American help and his party of treason - charges the opposition says are politically motivated to ensure Hun Sen keeps his more than three-decade hold on power.
Sweden said on Tuesday it was stopping some aid and the United States said it was ending election funding and would take further concrete steps.
World Bank senior country economist Miguel Sanchez said uncertainty had affected Cambodia in previous election years, leading to postponed investment decisions and a decline in foreign currency deposits.
"It was temporary," he told a news conference.
(Reporting by Prak Chan Thul; Editing by Jacqueline Wong)