IMF Executive Board Concludes 2024 Article IV Consultation with Cambodia
IMF News, January 27, 2025
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- Published: January 27, 2025
Overview and growth projections
- The Executive Board concluded the Article IV consultation with Cambodia.
- Cambodia’s economy continued to recover, albeit at a modest pace.
- Real GDP:
- 2024: 5.5 percent
- 2025 (projected): 5.8 percent
- Inflation:
- 2024: 0.5 percent
- 2025 (projected): 2 percent
- Risks to the outlook are tilted to the downside from external factors and domestic vulnerabilities, including:
- policy changes by major trading partners,
- geoeconomic fragmentation,
- continued weakness in the construction and real estate sectors.
Drivers of the recovery and sectoral outlook
- Recovery characteristics:
- Growth driven mainly by external demand.
- Strong rebound in garment exports and high growth in agricultural exports.
- Tourism experienced a structural shift in its composition, causing a lagged recovery in tourism receipts.
- Growth in non-tradable sectors remains weak.
- Credit and sector corrections:
- Credit-to-GDP ratio rose from 24 percent in 2010 to 135 percent in 2023 after sustained credit expansion.
- Credit growth has come to a near halt.
- Construction and real estate sectors undergoing a correction, with rising non-performing loans and emerging signs of private-sector debt overhang.
Fiscal stance, public finance, and external balances
- Fiscal projections and stance:
- Fiscal deficit:
- 2024: 3 percent
- 2025 (projected): 2.4 percent of GDP
- Medium-term fiscal framework envisages gradual fiscal consolidation.
- Public debt remains below 30 percent of GDP over the next decade.
- Current account and external sector:
- Current account balance:
- 2024: deficit of 1.8 percent of GDP
- 2025 (projected): deficit of 2.5 percent of GDP
- Drivers: strong demand for imports outpacing recovery in exports and tourism; export growth expected to moderate.
Executive Board assessment and policy recommendations
- Overall assessment:
- Directors welcomed the continuing recovery driven by garment and agricultural exports and improving tourism activity.
- Recovery is uneven; risks are tilted to the downside.
- Importance stressed on policies to safeguard macrofinancial stability, ensure a durable and inclusive recovery, and achieve medium-term development goals.
- Fiscal policy recommendations:
- Support for a neutral fiscal stance in the near term.
- Importance of gradual and high-quality consolidation over the medium term underpinned by sound fiscal frameworks to maintain debt sustainability and strengthen resilience.
- Strengthen the medium-term fiscal framework with more conservative and transparent fiscal rules.
- Further mobilize revenues through rationalizing tax exemptions and implementing tax policy reforms.
- Enhance spending efficiency and strengthen public investment management to rebuild fiscal buffers and safeguard priority social and capital spending.
- Foster development of the domestic government bond market as access to concessional foreign financing will be reduced when Cambodia graduates from Least Developed Country status.
- Sound management of fiscal risks from state-owned enterprises and public-private partnerships.
- Monetary and financial sector recommendations:
- Support for a measured pace of monetary policy normalization while maintaining adequate financial system liquidity.
- Continue efforts to modernize the monetary policy framework to enhance policy transmission and support de-dollarization.
- Phase out forbearance measures and develop a comprehensive plan to safeguard financial stability given corrections in construction and real estate sectors, declining FDI inflows, and rising nonperforming loans.
- Strengthen risk-based supervision, improve macroprudential policy, enhance coordination among financial sector supervisory agencies, and intensify oversight of the real estate sector.
- Structural and governance recommendations:
- Promote economic diversification and improve competitiveness through structural reforms.
- Enhance human capital, invest in infrastructure, strengthen the business environment, address climate vulnerabilities, and promote renewable energy to attract more diversified FDI.
- Strengthen governance and institutions, improve transparency, enhance the AML/CFT framework, and address data limitations through capacity development.
Key statistics and selected indicators (highlights from Table 1)
- Per capita GDP (2022, US$): 1,546
- Population (2022, million): 16.7
- Life expectancy (2019, years): 75.5
- Literacy rate (2019, percent): 87.7
- Output and prices (annual percent change):
- GDP at constant prices:
- 2021: 3.1
- 2022: 5.1
- 2023: 5.0
- 2024: 5.5
- 2025 (proj.): 5.8
- 2026 (proj.): 6.2
- 2027 (proj.): 6.0
- Inflation (end-year):
- 2021: 3.7
- 2022: 2.9
- 2023: 2.7
- 2024: 1.5
- 2025 (proj.): 2.1
- 2026 (proj.): 3.2
- 2027 (proj.): 3.0
- Inflation (annual average):
- 2021: 5.3
- 2022: 0.4
- Saving and investment (in percent of GDP):
- Gross national saving:
- 2021: 0.8
- 2022: 15.6
- 2023: 33.6
- 2024: 30.7
- 2025 (proj.): 30.0
- 2026 (proj.): 29.2
- 2027 (proj.): 29.3
- Government saving:
- 2021: 0.3
- 2022: 4.1
- 2023: 6.1
- 2024: 7.1
- 2025 (proj.): 8.1
- 2026 (proj.): 9.1
- 2027 (proj.): 10.1
- Private saving:
- 2021: 0.5
- 2022: 12.5
- 2023: 29.5
- 2024: 25.6
- 2025 (proj.): 23.9
- 2026 (proj.): 22.1
- 2027 (proj.): 21.1
- Gross fixed investment:
- 2021: 30.4
- 2022: 34.6
- 2023: 32.3
- 2024: 32.5
- Government investment:
- 2021: 6.6
- 2022: 5.6
- 2023: 5.2
- 2024: 4.5
- 2025 (proj.): 4.3
- 2026 (proj.): 4.2
- 2027 (proj.): 3.9
- 2028 (proj.): 3.8
- Private investment:
- 2021: 23.8
- 2022: 29.0
- 2023: 26.5
- 2024: 27.4
- 2025 (proj.): 28.0
- 2026 (proj.): 28.2
- 2027 (proj.): 28.4
- 2028 (proj.): 28.6
- 2029 (proj.): 28.7
- Money and credit (annual percent change):
- Broad money:
- 2021: 16.4
- 2022: 8.2
- 2023: 8.5
- 2024: 7.9
- 2025 (proj.): 10.5
- 2026 (proj.): 11.3
- 2027 (proj.): 9.0
- Private sector credit:
- 2021: 23.6
- 2022: 18.5
- 2023: 3.5
- 2024: 4.0
- 2025 (proj.): 7.0
- 2026 (proj.): 10.0
- Velocity of money:
- 2021: 1.1
- 2022: 1.0
- Public finance (in percent of GDP):
- Revenue:
- 2021: 15.8
- 2022: 18.1
- 2023: 15.9
- 2024: 14.9
- 2025 (proj.): 15.0
- 2026 (proj.): 15.1
- 2027 (proj.): 15.2
- Domestic revenue:
- 2021: 14.7
- 2022: 13.7
- 2023: 13.8
- 2024: 14.0
- 2025 (proj.): 14.1
- 2026 (proj.): 14.4
- Of which: Tax revenue:
- 2021: 13.2
- 2022: 13.0
- 2023: 12.1
- 2024: 12.2
- 2025 (proj.): 12.3
- 2026 (proj.): 12.7
- Grants:
- 2021: 1.7
- 2022: 1.2
- 2023: 0.9
- Expenditure:
- 2021: 21.0
- 2022: 18.4
- 2023: 18.7
- 2024: 17.9
- 2025 (proj.): 17.3
- 2026 (proj.): 17.1
- 2027 (proj.): 17.2
- Expense:
- 2021: 12.8
- 2022: 12.9
- 2023: 13.3
- 2024: 13.4
- Net lending (+)/borrowing(-):
- 2021: -5.2
- 2022: -0.3
- 2023: -2.8
- 2024: -3.0
- 2025 (proj.): -2.4
- 2026 (proj.): -2.2
- 2027 (proj.): -2.1
- 2028 (proj.): -2.0
- Net lending (+)/borrowing(-) excluding grants:
- 2021: -6.3
- 2022: -4.0
- 2023: -4.2
- 2024: -3.6
- 2025 (proj.): -3.3
- 2026 (proj.): -3.2
- Total public debt (in percent of GDP):
- 2021: 25.9
- 2022: 25.0
- 2023: 25.7
- 2024: 26.8
- 2025 (proj.): 27.8
- 2026 (proj.): 27.7
- Balance of payments (millions of dollars):
- Exports, f.o.b.:
- 2021: 19,527
- 2022: 23,175
- 2023: 23,569
- 2024: 26,745
- 2025 (proj.): 28,595
- 2026 (proj.): 30,942
- 2027 (proj.): 33,449
- 2028 (proj.): 36,307
- 2029 (proj.): 39,457
- Annual percent change (selected): 2021: 5.7; 2022: 13.5; 2023: 6.9; 2024: 8.7
- Imports, f.o.b.:
- 2021: -30,726
- 2022: -31,995
- 2023: -26,553
- 2024: -31,055
- 2025 (proj.): -33,244
- 2026 (proj.): -35,626
- 2027 (proj.): -38,605
- 2028 (proj.): -41,871
- 2029 (proj.): -45,434
- Annual percent change (selected): 2021: 46.4; 2022: -17.0; 2023: 17.0; 2024: 7.2; 2025 (proj.): 8.4
- Current account (including official transfers) (millions of dollars):
- 2021: -10,886
- 2022: -7,572
- 2023: 555
- 2024: -847
- 2025 (proj.): -1,269
- 2026 (proj.): -1,794
- 2027 (proj.): -1,993
- 2028 (proj.): -2,175
- 2029 (proj.): -2,283
- Current account (in percent of GDP): 2021: -29.6; 2022: -19.0; 2023: 1.3; 2024: -1.8; 2025 (proj.): -2.5; 2026 (proj.): -3.4
- Gross official reserves:
- 2021: 20,265
- 2022: 17,805
- 2023: 19,998
- 2024: 20,753
- 2025 (proj.): 23,064
- 2026 (proj.): 26,887
- 2027 (proj.): 30,951
- 2028 (proj.): 35,422
- 2029 (proj.): 40,351
- In months of prospective imports (selected): 2021: 7.3; 2022: 7.4; 2023: 8.3
- Total public debt (in millions of dollars):
- 2021: 9,505
- 2022: 9,971
- 2023: 11,187
- 2024: 12,473
- 2025 (proj.): 13,932
- 2026 (proj.): 15,218
- 2027 (proj.): 16,508
- 2028 (proj.): 17,912
- 2029 (proj.): 19,453
- Public external debt (in millions of dollars):
- 2021: 12,387
- 2022: 13,726
- 2023: 14,939
- 2024: 16,178
- 2025 (proj.): 17,548
- 2026 (proj.): 18,978
- Public debt service (millions of dollars):
- 2021: 397
- 2022: 427
- 2023: 449
- 2024: 418
- 2025 (proj.): 439
- 2026 (proj.): 458
- 2027 (proj.): 482
- 2028 (proj.): 506
- 2029 (proj.): 533
- In percent of exports of goods and services (selected): 2021: 2.0
- Memorandum items:
- Nominal GDP (in billions of Riels):
- 2021: 150,793
- 2022: 164,059
- 2023: 177,719
- 2024: 190,603
- 2025 (proj.): 205,946
- 2026 (proj.): 225,291
- 2027 (proj.): 245,726
- 2028 (proj.): 267,845
- 2029 (proj.): 292,066
- Nominal GDP (in millions of U.S. dollars):
- 2021: 36,797
- 2022: 39,838
- 2023: 43,304
- 2024: 46,568
- 2025 (proj.): 50,180
- 2026 (proj.): 54,745
- 2027 (proj.): 59,548
- 2028 (proj.): 64,733
- 2029 (proj.): 70,395
Source: IMF Executive Board press release: IMF Executive Board Concludes 2024 Article IV Consultation with Cambodia.
