Press Release No. 25/394

Washington, DC: On November 21, 2025, the Executive Board of the International Monetary Fund (IMF) completed the Article IV Consultation for Cambodia.^[1] The authorities have consented to the publication of the Staff Report prepared for this consultation.^[2]

The Cambodia’s economy continued to accelerate in 2024, and growth reached 6.0 percent, bolstered by a strong rebound in garment and agricultural exports and a continued recovery in tourism. This trend continued into the first half of 2025, with nowcasting estimates pointing to year-on-year growth of 6.2 percent. However, a confluence of shocks—trade disruptions, border tensions, and anemic credit growth—exposed the economy’s vulnerabilities, and signs of economic slowdown are emerging in the second half of 2025.

Economic growth is projected to decelerate to 4.8 percent in 2025 and further to around 4.0 percent in 2026. The downward revision from the 2024 Article IV staff report reflects remittance losses and a tourism slowdown, which are expected to weigh on domestic demand. Tariff effects will lower export earnings as manufacturers face margin pressures.

Risks are tilted to the downside, driven by financial sector vulnerabilities associated with the array of shocks. Trade policy uncertainty could further disrupt export growth. Renewed border tensions could undermine confidence, amplifying adverse effects on domestic demand, tourism, and financial sector stability. Elevated private debt, rising NPLs, and governance vulnerabilities could further amplify risks to financial stability. On the upside, deeper regional trade and investment integration could promote export growth. Successful reintegration of returned workers into the domestic labor market could support a stronger recovery in domestic demand.

Executive Board Assessment^[3]

Executive Directors agreed with the thrust of the staff appraisal. While Cambodia’s economy grew strongly in 2024, the recovery remains uneven and is decelerating, impacted by subdued domestic demand, border tensions, trade disruptions, and a real estate correction.  Directors also cautioned that risks are tilted to the downside and that Cambodia’s growth model remains vulnerable due to reliance on a narrow export base. They urged the authorities to safeguard macroeconomic stability and enhance resilience through a comprehensive and well‑coordinated implementation of fiscal, monetary and structural policies.

Directors agreed that fiscal policy should cushion the impact of current shocks while preserving fiscal prudence. They highlighted the importance of temporary and targeted support for vulnerable households and displaced workers, alongside active labor market policies. Over the medium term, gradual, growth‑friendly consolidation is needed to rebuild buffers and maintain fiscal sustainability. Directors also underscored the critical role of revenue mobilization and welcomed efforts to improve expenditure efficiency and infrastructure governance.

Directors emphasized that monetary policy should remain agile and responsive to evolving conditions. They encouraged the authorities to gradually proceed with normalization, including restoring reserve requirements to pre‑pandemic levels, while continuing efforts to strengthen monetary transmission in Khmer Riel and improve liquidity management. Directors welcomed ongoing modernization of the policy framework and underscored the importance of transparent communication to enhance policy credibility.

Directors agreed that financial sector policies should focus on managing rising risks and reinforcing oversight. They supported the phase‑out of forbearance by end‑2025 to enable timely recognition of distressed assets and recapitalization. Directors stressed the need to enhance supervisory capacity, including asset quality reporting, stress testing, and early intervention. They encouraged reforms to insolvency and crisis management frameworks, the establishment of a deposit insurance scheme, and called for further efforts to address AML/CFT vulnerabilities.

Directors underscored the urgency of accelerating structural reforms to diversify exports, enhance productivity and competitiveness, and improve trade facilitation. They stressed that governance reforms are essential to enhance business environment, bolster investor confidence, and ensure sustainable and inclusive development, and encouraged continued efforts to address data limitations.

 

Cambodia: Selected Economic Indicators, 2022 – 26 1/ Per capita GDP (2023, US$): 2,477                   Life expectancy (2022, years): 70.0 Population (2023, million):    17.1                   Literacy rate (2022, percent):  83.8

2022 2023 2024 2025 2026 Est. Proj. Output and prices (annual percent change)           GDP in constant prices 5.1 5.0 6.0 4.8 4.0 Inflation (end-year) 2.9 2.7 3.0 1.0 2.2 (Annual average) 5.3 2.1 0.9 2.5 2.3 Saving and investment balance (in percent of GDP) Gross national saving 15.9 34.6 32.7 30.5 28.0 Government saving 3.7 1.8 2.3 0.7 0.5 Private saving 12.2 32.8 30.3 29.8 27.5 Gross fixed investment 35.3 33.3 32.2 33.5 32.6 Government investment 5.7 5.9 5.3 5.1 5.0 Private investment 29.6 27.4 26.9 28.4 27.6 Money and credit (annual percent change, unless otherwise indicated) Broad money 8.2 12.5 17.5 8.7 5.1 Private sector credit 18.5 3.5 3.1 3.2 3.5 Velocity of money 2/ 0.9 0.9 0.8 0.9 0.9 Public finance (in percent of GDP)       Revenue 18.4 16.2 15.2 14.6 14.4 Domestic revenue 16.7 15.0 14.3 13.9 13.7 Of which: Tax revenue 15.0 13.3 12.5 12.2 11.9 Grants 1.7 1.3 0.9 0.7 0.7 Expenditure 18.7 19.1 17.3 18.3 18.2 Expense 13.0 13.2 11.9 13.2 13.2 Net acquisition of nonfinancial assets 5.7 5.9 5.3 5.1 5.0 Net lending (+)/borrowing(-) -0.3 -2.8 -2.1 -3.7 -3.8 Net lending (+)/borrowing(-) excluding grants -2.0 -4.1 -3.0 -4.4 -4.5 Net acquisition of financial assets 1.5 -0.3 2.4 -1.8 -1.9 Net incurrence of liabilities 3/ 1.8 2.5 4.4 1.8 1.9 Total public debt (In percent of GDP) 25.5 26.3 26.1 26.5 27.2 Balance of payments (in millions of dollars, unless otherwise indicated) Exports, f.o.b. 23,175 23,569 26,752 30,297 31,571 (Annual percent change) 18.7 1.7 13.5 13.3 4.2 Imports, f.o.b. -31,995 -26,553 -31,247 -35,556 -37,092 (Annual percent change) 4.1 -17.0 17.7 13.8 4.3 Current account (including official transfers) -7,572 554 229 -1,474 -2,372 (In percent of GDP) -19.4 1.3 0.5 -3.0 -4.5 Gross official reserves 4/ 17,805 19,998 22,511 23,511 26,059 (In months of prospective imports) 7.3 7.0 6.8 6.9 7.1             Total public debt (in millions of dollars) 9,971 11,188 12,028 13,042 14,192 (In percent of GDP) 25.5 26.3 26.1 26.5 27.2 External debt (in millions of dollars, unless otherwise indicated)           Public external debt 9,971 11,188 11,915 12,884 13,911 (In percent of GDP) 25.5 26.3 25.9 26.2 26.7 Public debt service 420 442 449 637 735 (In percent of exports of goods and services) 1.6 1.6 1.4 1.8 2.0 Nominal effective exchange rate (index, trade partners by CPI) 122.4 123.3 125.8 … … Real effective exchange rate (index, based on CPI) 134.0 132.4 132.5 … … Memorandum items:           Nominal GDP (in billions of Riels) 160,972 174,027 188,766 201,830 213,914 (In millions of U.S. dollars) 39,089 42,404 46,098 49,200 52,146 Sources: Cambodian authorities; and IMF staff estimates and projections.                               1/ Based on the rebased GDP.                         2/ Ratio of nominal GDP to the average stock of broad money.                               3/ Includes statistical discrepancy.                    4/ Includes unrestricted foreign currency deposits held at the National Bank of Cambodia.

[1] Under Article IV of the IMF's Articles of Agreement, the IMF holds bilateral discussions with members, usually every year. A staff team visits the country, collects economic and financial information, and discusses with officials the country's economic developments and policies. On return to headquarters, the staff prepares a report, which forms the basis for discussion by the Executive Board.

[2] Under the IMF's Articles of Agreement, publication of documents that pertain to member countries is voluntary and requires the member consent. The staff report will be shortly published on the Cambodia and the IMF page.

[3] At the conclusion of the discussion, the Managing Director, as Chair of the Board, summarizes the views of Executive Directors, and this summary is transmitted to the country's authorities. An explanation of any qualifiers used in summings up can be found here: http://www.IMF.org/external/np/sec/misc/qualifiers.htm.