NBC governor Chea Serey and Davide Furceri, IMF’s mission chief to Cambodia, met for talks on October 31. NBC
The International Monetary Fund’s (IMF) Article IV Consultation team has recognised Cambodia for its robust actions against money laundering and terrorism financing.
Following the nation’s exit from the “grey list” of the Financial Action Task Force’s (FATF) – an intergovernmental body set up to develop policies to combat international money laundering and terrorism financing – in February, the IMF highlighted the progress made and encouraged further efforts to enhance governance and transparency.
Davide Furceri, IMF’s mission chief to Cambodia, made the commendation in an October 31 press release at the end of the group’s two-week visit to the country.
The team engaged with a range of ministries, state and private entities, including the National Bank of Cambodia (NBC), to review the country’s economic conditions and chart the course for future development, as per the press release.
Furceri specifically urged the country to strengthen governance and transparency to foster foreign direct investment (FDI), stating these as key elements in securing macroeconomic stability and fostering policy development.
He said that strong governance will guarantee macroeconomic stability, enabling enhanced economic oversight and policy formulation.
He also advocated for economic infrastructure reform to widen trade partnerships, attract new investments and provide adaptable capital for an evolving economy. The IMF assured continued support through technical and capacity-building assistance.
“The public debt of Cambodia should increase at an average level. While the risk of a debt crisis remains low, private debt posted a remarkable increase. Therefore, it requires detailed checks,” he said, addressing concerns about debt.
The IMF’s forecast for the country’s economic growth is at 5.3 per cent for the current year, with the potential to climb to 6 per cent in 2024, buoyed by the recovery in tourism and the export of solar panels and electrical circuits.
It noted, however, that challenges persist due to garment exports remaining sluggish and the construction and real estate sectors only just regaining momentum.
The group cautions that the economic outlook is still uncertain post-pandemic, with reduced demand from leading economies and heightened global geopolitical competition. A particular concern for Cambodia is the surging levels of private debt within the country.
Government spokesperson Pen Bona expressed the country’s contentment with the IMF evaluation.
“Both former and current governments have kept up the effort to combat money laundering crime to draw investors to Cambodia,” he said, highlighting the proactive measures taken to create a conducive atmosphere for FDI, crucial for job creation and economic growth.
Pa Chanroeun, president of the Cambodian Institute for Democracy (CID), said the IMF’s acknowledgement is a positive indicator of the Kingdom’s growing stature on the international stage and its ability to attract investment.
“The government must further reinforce governance, transparency, accountability and responsiveness, while continuing to combat corruption. These measures act as a safeguard for both domestic and international investors engaged in Cambodian business ventures,” he said.
