September 28, 2026
PRESS OFFICER: Pavis Devahasadin
Phone: +1 202 623-7100Email: MEDIA@IMF.org
Washington, DC: On September 22, 2026, the Executive Board of the International Monetary Fund (IMF) completed the Article IV Consultation for Cambodia and endorsed the staff appraisal without a meeting on a lapse-of-time basis.[1] The authorities have consented to the publication of the Staff Report prepared for this consultation.[2]
Cambodia’s economy remained resilient in 2025, supported by robust manufacturing exports, foreign direct investment, and infrastructure projects. Growth nevertheless 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 but increasingly becoming broad based. Financial conditions also tightened, with weaker credit and deposit growth and rising asset-quality pressures.
Growth is projected to slow to 3.0 percent in 2026 before recovering to 4.0 percent in 2027, reflecting higher energy costs, weaker tourism and remittances, decelerating garment exports, subdued domestic demand, and tighter financial conditions. Inflation is expected to remain elevated at 5.6 percent in 2026 before easing as energy prices normalize. The current account deficit is projected to widen sharply, although resilient foreign direct investment and adequate international reserves provide important buffers. Risks to growth are tilted to the downside, including from renewed energy and trade disruptions, persistent scam activities, and a sharper real estate correction. On the upside, the authorities’ planned fiscal stimulus could boost growth. Potential disruptions from El Niño conditions could keep price pressures elevated.
Executive Board Assessment[3]
Cambodia’s economy has remained resilient through successive and concurrent shocks, but the near-term outlook has weakened with signs of macro-financial strains. Growth is projected to slow in 2026 as higher energy costs, weaker tourism and remittances, decelerating garment exports, subdued domestic demand, and tighter financial conditions weigh on activity. Inflation has risen sharply and broadened beyond energy prices. The fiscal deficit remains within the authorities’ prescribed ceiling, and public debt is sustainable with a low risk of debt distress. The current account deficit is projected to widen in 2026, though foreign exchange reserves provide adequate buffers. The 2025 external position is assessed as broadly in line with fundamentals and desirable policies. The end of regulatory forbearance has exposed asset-quality strains amid continued real estate weakness and financial integrity concerns, and financial vulnerabilities have heightened although systemic risks remain contained.
Risks to growth are tilted to the downside, while inflation risks remain on the upside. Trade policy uncertainty and persistent scam activities could further weaken exports and tourism, hamper investment, and raise financial stability concerns. Renewed energy market volatility, supply disruptions, and climate shocks could raise price volatility and reduce activity. A sharper real estate correction could amplify losses through concentrated bank exposures, developer financing, and weakened repayment capacity. On the upside, the authorities’ planned fiscal stimulus could boost growth, and stability in the global commodity markets would ease inflation and support activity.
Fiscal policy needs to cushion the near-term slowdown through targeted support and advance development priorities over the medium term, while maintaining debt sustainability. Broad fuel-related support should be phased out as price pressures ease, with assistance focused on vulnerable households. As concessional financing declines, stronger domestic revenue mobilization, domestic bond market development, and better expenditure allocation and execution will be essential to finance development priorities. Transparent costing and rationalization of tax expenditures, stronger compliance, and tax-base broadening are needed for sustained revenue mobilization. Operationalizing the fiscal rule and buffer fund, improving public investment and cash management, and strengthening oversight of PPP and SOE risks would help rebuild policy space. Enhancing the integrity of the treasury single account will help make judicious borrowing decisions, well aligned with actual financing needs.
Monetary policy needs to remain agile to evolving inflation and foreign currency liquidity pressures. The broadly stable riel–U.S. dollar exchange rate continues to provide the main nominal anchor. Absorbing the excess riel liquidity through market-based operations is needed 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. More effective liquidity forecasting and operations, deeper interbank markets, and stronger transmission in riel would improve policy effectiveness and support gradual de-dollarization.
Financial sector priorities are decisive balance-sheet repair, stronger NPL resolution, and tighter oversight to safeguard financial stability. This requires timely risk recognition, adequate provisioning, and credible capital planning, using bank-specific stress testing and forward-looking assessments to differentiate their responses. The authorities need to operationalize crisis-management tools, make emergency liquidity assistance available only to institutions assessed as solvent, and resolve nonviable institutions promptly. The deposit protection and out-of-court liquidation frameworks should be finalized, while NPL resolution and foreclosure procedures should be strengthened. Better reporting and closer coordination are needed to strengthen oversight of concentrated real estate, developer, large-borrower, and related-party exposures.
Decisive action to strengthen financial integrity supported by stronger cooperation among all relevant agencies is essential to safeguard confidence, financial stability, and Cambodia’s international reputation. The authorities need to urgently identify and address potential links between criminal activity and banks and close significant gaps in the licensing frameworks. Deepening understanding of how the proceeds of scam activities and human-trafficking are laundered will enable more targeted mitigation. The development of a regulatory framework for virtual asset sector should be taken forward and effectively enforced once enacted. These measures should form an integral part of the broader anti-scam policies involving all relevant domestic agencies to maximize policy synergy, which could facilitate stronger international cooperation.
Structural reform priority is to raise the productivity payoff from investment and strengthen economic resilience. A focused implementation agenda would prioritize reforms that attract higher-quality FDI, crowd in domestic investment, deepen supplier linkages, upgrade skills, and strengthen technology transfer. Better governance, rule of law, and more predictable enforcement would improve the investment climate. Investments in energy security and climate resilience, together with better data and interagency information sharing, would strengthen competitiveness, risk monitoring, and policy design.
Cambodia: Selected Economic Indicators, 2023 – 27 1/ Per capita GDP (2025, US$): 2,818 Life expectancy (2024, years): 71.0 Population (2025, million): 17.8 Literacy rate (2022, percent): 83.8 | |||||
2023 | 2024 | 2025 | 2026 | 2027 | |
Proj. | |||||
| Output and prices (annual percent change) | |||||
| GDP in constant prices | 5.0 | 6.0 | 5.3 | 3.0 | 4.0 |
| Inflation (end-year) | 2.7 | 3.0 | 1.2 | 5.8 | 2.9 |
| (Annual average) | 2.1 | 0.8 | 2.5 | 5.6 | 3.1 |
| Saving and investment balance (in percent of GDP) | |||||
| Gross national saving | 34.6 | 32.7 | 27.8 | 23.4 | 25.3 |
| Government saving | 1.8 | 3.1 | 3.2 | 1.4 | 2.0 |
| Private saving | 32.8 | 29.6 | 24.7 | 22.0 | 23.4 |
| Gross fixed investment | 33.3 | 32.2 | 31.5 | 32.1 | 33.1 |
| Government investment | 5.9 | 5.2 | 4.6 | 4.7 | 5.2 |
| Private investment | 27.4 | 27.0 | 26.9 | 27.4 | 27.9 |
Money and credit (annual percent change, unless otherwise indicated) | |||||
| Broad money | 12.8 | 17.5 | 12.8 | 3.9 | 6.4 |
| Private sector credit | 3.9 | 3.9 | 6.2 | 3.5 | 4.5 |
| Velocity of money 2/ | 0.9 | 0.8 | 0.8 | 0.8 | 0.8 |
| Public finance (in percent of GDP) | |||||
| Revenue | 16.2 | 15.1 | 15.0 | 14.6 | 14.6 |
| Domestic revenue | 15.0 | 14.4 | 14.5 | 14.2 | 14.2 |
| Of which: Tax revenue | 13.3 | 12.5 | 12.6 | 12.2 | 12.3 |
| Grants | 1.3 | 0.7 | 0.5 | 0.4 | 0.4 |
| Expenditure | 19.1 | 16.6 | 16.0 | 17.5 | 17.4 |
| Expense | 13.2 | 11.3 | 11.4 | 12.8 | 12.2 |
| Net acquisition of nonfinancial assets | 5.9 | 5.2 | 4.6 | 4.7 | 5.2 |
| Net lending (+)/borrowing (-) | -2.8 | -1.4 | -1.0 | -2.9 | -2.8 |
| Net lending (+)/borrowing (-) excluding grants | -4.1 | -2.2 | -1.5 | -3.3 | -3.2 |
| Net acquisition of financial assets 3/ | 0.1 | 1.2 | 0.9 | -0.9 | -1.1 |
| Net incurrence of liabilities 4/ | 2.9 | 2.7 | 1.9 | 2.1 | 1.7 |
Balance of payments (in millions of dollars, unless otherwise indicated) | |||||
| Exports, f.o.b. | 23,569 | 26,756 | 31,358 | 35,683 | 39,533 |
| (Annual percent change) | 1.7 | 13.5 | 17.2 | 13.8 | 10.8 |
| Imports, f.o.b. | -26,553 | -31,243 | -36,932 | -43,150 | -46,917 |
| (Annual percent change) | -17.0 | 17.7 | 18.2 | 16.8 | 8.7 |
| Current account (including official transfers) | 554 | 237 | -1,868 | -4,733 | -4,486 |
| (In percent of GDP) | 1.3 | 0.5 | -3.7 | -8.7 | -7.8 |
| Gross official reserves 5/ | 19,998 | 22,511 | 27,530 | 27,652 | 27,919 |
| (In months of prospective imports) | 9.0 | 8.6 | 8.9 | 7.7 | 7.1 |
| Total public debt (in millions of dollars) | 11,188 | 12,025 | 13,068 | 13,561 | 14,557 |
| (In percent of GDP) | 26.3 | 26.1 | 25.5 | 25.1 | 25.2 |
| External debt (in millions of dollars, unless otherwise indicated) | |||||
| Public external debt | 11,188 | 11,912 | 12,820 | 12,820 | 13,826 |
| (In percent of GDP) | 26.3 | 25.9 | 25.1 | 23.7 | 23.9 |
| Public debt service | 442 | 449 | 637 | 751 | 820 |
| (In percent of exports of goods and services) | 1.6 | 1.4 | 1.7 | 1.9 | 1.8 |
| Nominal effective exchange rate (index, trade partners by CPI) | 123.3 | 126.0 | 126.0 | … | … |
| Real effective exchange rate (index, based on CPI) | 132.4 | 133.0 | 132.8 | … | … |
| Memorandum items: | |||||
| Nominal GDP (in billions of Riels) | 174,027 | 188,766 | 205,757 | 218,292 | 233,149 |
| (In millions of U.S. dollars) | 42,404 | 46,098 | 50,659 | 54,180 | 57,752 |
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/ Projections assume a drawdown in government deposit held at the National Bank of Cambodia. 4/ Includes statistical discrepancy. 5/ 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 www.imf.org/Cambodia 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.
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