PHNOM PENH, Feb. 19 (Xinhua) — While the Cambodian government expects the country's economy to grow at about 7 percent for the next two years, downside risks emanating from the banking and real estate sectors are a growing concern, a local newspaper reported Friday citing officials.

A rapid expansion of credit in the financial sector combined with a potential oversupply in the real estate sector are particularly worrying signs, said Vongsey Vissoth, secretary of state at the Finance Ministry, on the sidelines of a forum on Cambodia's macroeconomic management on Thursday.

"We are concerned about risks in the banking and finance sectors, as the size of lending is very big," Vissoth was quoted as saying by the Cambodia Daily.

"(And) especially in the construction and real estate sectors, which are showing signs of oversupply."

"The National Bank and the government are considering ways to slow credit growth, and we may implement caps for fragile sectors, like construction and real estate," he added.

Last year, credit from the country's lending institutions was similar to deposit levels as a percentage of gross domestic product, according to figures provided by the finance ministry.

However, officials are concerned that credit may soon outstrip deposits, given that total credit grew by about 30 percent last year, while deposits grew by only 19 percent.

Chheang Vanarith, director of the ministry's macroeconomic department, explained that a high credit-to-deposit ratio could expose banks to cash-flow issues if loans cannot be repaid, with lending to the real estate sector a notable concern.

"Real estate is expanding rapidly. We worry that soon there may be an oversupply and rise in vacancies," Vanarith was quoted as saying by the newspaper.

"This may put loans in the sector at risk, so we are researching and monitoring it even closer."

One-eighth of bank credit last year went to the country's construction and real estate sectors, according to the ministry.