IMF Executive Board Concludes 2026 Article IV Consultation with Cambodia
IMF News, September 28, 2026
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- Published: September 28, 2026
Overview and recent developments
- The Executive Board of the International Monetary Fund completed the Article IV Consultation for Cambodia and endorsed the staff appraisal without a meeting on a lapse-of-time basis. The authorities consented to publication of the Staff Report.
- Cambodia’s economy remained resilient in 2025, supported by robust manufacturing exports, foreign direct investment, and infrastructure projects, but growth slowed to 5.3 percent as domestic demand remained subdued amid a prolonged real estate correction.
- Border tensions with Thailand reduced land-based tourism and remittances and prompted the return of nearly one million migrant workers.
- Inflation rose sharply in early 2026, initially driven by higher energy prices and then broadening beyond energy. Financial conditions tightened with weaker credit and deposit growth and rising asset-quality pressures.
Near-term outlook and risks (IMF projections)
- Growth projections:
- Growth is projected to slow to 3.0 percent in 2026.
- Growth is projected to recover to 4.0 percent in 2027.
- Inflation projections:
- Inflation (annual average) is projected at 5.6 percent in 2026 and 3.1 percent in 2027.
- Inflation (end-year) was 1.2 percent in 2025 and is projected at 5.8 percent in 2026 and 2.9 percent in 2027.
- Balance and external sector:
- The current account deficit is projected to widen sharply in 2026, though resilient foreign direct investment and adequate international reserves provide important buffers.
- Downside risks:
- Potential energy and trade disruptions, continued real estate weakness, financial integrity concerns, persistent scam activities, and financial vulnerabilities.
- Climate shocks and potential El Niño disruptions could keep price pressures elevated.
- Upside risk:
- The authorities’ planned fiscal stimulus could boost growth.
Executive Board assessment (summary)
- Cambodia has remained resilient through successive shocks, but the near-term outlook weakened with signs of macro-financial strains.
- Fiscal deficit remains within the authorities’ prescribed ceiling; public debt is sustainable with a low risk of debt distress.
- The 2025 external position is assessed as broadly in line with fundamentals and desirable policies.
- The end of regulatory forbearance exposed asset-quality strains amid continued real estate weakness and financial integrity concerns; financial vulnerabilities have heightened though systemic risks remain contained.
Fiscal policy recommendations
- Cushion the near-term slowdown through targeted support while maintaining debt sustainability.
- Phase out broad fuel-related support as price pressures ease; focus assistance on vulnerable households.
- As concessional financing declines, prioritize:
- Stronger domestic revenue mobilization.
- Domestic bond market development.
- Better expenditure allocation and execution.
- Implement transparent costing and rationalization of tax expenditures, strengthen compliance, and broaden the tax base.
- Operationalize the fiscal rule and buffer fund; improve public investment and cash management.
- Strengthen oversight of PPP and SOE risks and enhance the integrity of the treasury single account to align borrowing with actual financing needs.
Monetary policy recommendations
- Remain agile to evolving inflation and foreign currency liquidity pressures.
- Maintain the broadly stable riel–U.S. dollar exchange rate as the main nominal anchor.
- Absorb excess riel liquidity through market-based operations if second-round inflationary pressures broaden.
- Any foreign currency liquidity support should be temporary, collateralized, limited to solvent institutions, and consistent with preserving reserve adequacy.
- Improve liquidity forecasting and operations, deepen interbank markets, and strengthen transmission in riel to support gradual de-dollarization.
Financial sector priorities and integrity measures
- Priorities:
- Decisive balance-sheet repair.
- Stronger NPL resolution.
- Tighter oversight to safeguard financial stability.
- Actions required:
- Timely risk recognition, adequate provisioning, credible capital planning using bank-specific stress testing and forward-looking assessments.
- Operationalize crisis-management tools; make emergency liquidity assistance available only to institutions assessed as solvent; resolve nonviable institutions promptly.
- Finalize deposit protection and out-of-court liquidation frameworks; strengthen NPL resolution and foreclosure procedures.
- Improve reporting and coordination to oversee concentrated real estate, developer, large-borrower, and related-party exposures.
- Financial integrity:
- Urgently identify and address potential links between criminal activity and banks; close significant gaps in licensing frameworks.
- Deepen understanding of how proceeds from scam activities and human-trafficking are laundered to enable targeted mitigation.
- Develop and enforce a regulatory framework for the virtual asset sector once enacted.
- Integrate these measures into broader anti-scam policies involving all relevant domestic agencies to maximize policy synergy and facilitate stronger international cooperation.
Structural reform priorities
- Raise the productivity payoff from investment and strengthen economic resilience through a focused implementation agenda that prioritizes:
- Attracting higher-quality FDI and crowding in domestic investment.
- Deepening supplier linkages, upgrading skills, and strengthening technology transfer.
- Better governance, rule of law, and more predictable enforcement to improve the investment climate.
- Investments in energy security and climate resilience.
- Improved data and interagency information sharing to strengthen competitiveness, risk monitoring, and policy design.
Key statistics and projections (selected figures from IMF staff estimates and projections)
- Output and prices:
- GDP in constant prices: 2023 = 5.0; 2024 = 6.0; 2025 = 5.3; 2026 (Proj.) = 3.0; 2027 (Proj.) = 4.0.
- Inflation (end-year): 2023 = 2.7; 2024 = 3.0; 2025 = 1.2; 2026 (Proj.) = 5.8; 2027 (Proj.) = 2.9.
- Inflation (Annual average): 2023 = 2.1; 2024 = 0.8; 2025 = 2.5; 2026 (Proj.) = 5.6; 2027 (Proj.) = 3.1.
- Saving and investment (percent of GDP):
- Gross national saving: 2025 = 27.8; 2026 (Proj.) = 23.4; 2027 (Proj.) = 25.3.
- Gross fixed investment: 2025 = 31.5; 2026 (Proj.) = 32.1; 2027 (Proj.) = 33.1.
- Money and credit (annual percent change):
- Broad money: 2025 = 12.8; 2026 (Proj.) = 3.9; 2027 (Proj.) = 6.4.
- Private sector credit: 2025 = 6.2; 2026 (Proj.) = 3.5; 2027 (Proj.) = 4.5.
- Public finance (percent of GDP):
- Revenue: 2025 = 15.0; 2026 (Proj.) = 14.6; 2027 (Proj.) = 14.6.
- Expenditure: 2025 = 16.0; 2026 (Proj.) = 17.5; 2027 (Proj.) = 17.4.
- Net lending (+)/borrowing (-): 2025 = -1.0; 2026 (Proj.) = -2.9; 2027 (Proj.) = -2.8.
- Balance of payments (millions of dollars):
- Exports, f.o.b.: 2025 = 31,358; 2026 (Proj.) = 35,683; 2027 (Proj.) = 39,533.
- Imports, f.o.b.: 2025 = -36,932; 2026 (Proj.) = -43,150; 2027 (Proj.) = -46,917.
- Current account (including official transfers): 2025 = -1,868; 2026 (Proj.) = -4,733; 2027 (Proj.) = -4,486.
- Reserves and external position:
- Gross official reserves (millions of dollars): 2025 = 27,530; 2026 (Proj.) = 27,652; 2027 (Proj.) = 27,919.
- Reserves (In months of prospective imports): 2025 = 8.9; 2026 (Proj.) = 7.7; 2027 (Proj.) = 7.1.
- Public debt:
- Total public debt (millions of dollars): 2025 = 13,068; 2026 (Proj.) = 13,561; 2027 (Proj.) = 14,557.
- Total public debt (In percent of GDP): 2025 = 25.5; 2026 (Proj.) = 25.1; 2027 (Proj.) = 25.2.
- Memorandum items:
- Nominal GDP (in billions of Riels): 2025 = 205,757; 2026 (Proj.) = 218,292; 2027 (Proj.) = 233,149.
- Nominal GDP (In millions of U.S. dollars): 2025 = 50,659; 2026 (Proj.) = 54,180; 2027 (Proj.) = 57,752.