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Cambodia’s economy to stay healthy, says IMF
A senior official of the International Monetary Fund (IMF) said last week that Cambodia’s economy would stay healthier this year compared to other countries in the region thanks to the rapid socio-economic recovery, while its major trade partners are expected to achieve their respective high growths in the second half of this year, said a press statement.
The assessment of Cambodia’s economic health was presented on Tuesday last week during a meeting between MEF’s Minister Aun Pornmoniroth and IMF’s delegation led by its new Chief Staff Mission Davide Furceri and Yasuhisa Ojima, IMF’s Resident Representative for Cambodia at the ministry, said a MEF release on Thursday.
Furceri during the meeting said that Cambodia is expected to maintain high economic growth in 2023 as the Royal Government of Cambodia (RGC) has released intervention measures to mitigate the impacts of the global and regional economic uncertainties and unfavourable conditions.
“This factor would be able to push the economic growth of the country to an extent through the recovery of exports and the growth in service, tourism and non-garment industrial sectors,” said Furceri, adding that IMF would continue to provide technical assistance to develop capacities of RGC’s officials.
Pornmoniroth, who is also the Deputy Prime Minister, said the mission of IMF’s officials or staff visit to Cambodia would be much helpful for the country as its government has been preparing the macroeconomic and public finance policy frameworks for 2024, while the regional and global economies have been surrounded by high economic uncertainties.
“The high uncertainties have been caused by the unfavourable conditions of geopolitics, further tightening monetary policies, trade separation, economic separation and slower-than-expected economic growths of developed countries and others,” said Pornmoniroth, adding that Russia-Ukraine has been another negative factor that has affected Cambodia’s economy.
Pornmoniroth also lauded the IMF’s role in providing technical assistance and training to MEF officials and the assessment of the macroeconomic conditions, the implementation of public finance policies of Cambodia and its recommendations that are useful inputs for the preparation of the national policies and strategies of the government.
The Regional Economic Outlook for Asia and Pacific—IMF’s world economic and financial surveys for May 2023—shows that Cambodia’s Gross Domestic Product (GDP), which is one of the key macroeconomic indicators that reflects the health or growth of the entire economy of a country, is expected to grow by 5.8 percent and 6.2 percent respectively in 2023 and 2024.
National Bank of Cambodia (NBC) and IMF have just completed a workshop jointly organised in Siem Reap to strengthen the supervisory capacity of the central bank and monetary authority’s officials of its Directorate General of Banking Supervision in conducting the self-assessment of the Basel Core Principles about 10 days of the 26th ASEAN+3 Finance Ministers and Central Bank Governors Meeting in Incheon, South Korea.
NBC’s Deputy Governor Chea Serey told Khmer Times before the second session of the 26th ASEAN+3 Finance Ministers and Central Bank Governors Meeting started that Basel standards set the methods for banks to calculate sensitive ratios such as solvency and liquidity ratios most accurately to maintain the safety of the banking system, especially those that have cross-border transactions.
“As our country’s banking system is still small and simple without many cross-border transactions and we just select measures that are most applicable to us. However, we can say that we have implemented the three standards but just incompletely,” Serey said, adding that Basel standards have probably been upgraded to 3.5 level but not to 4 level.
“Our country is also unrelated to the cases of bank collapses but they are the lessons learned that we may study further regarding how to implement policies on high-risk deposits and other points,” said Serey, when asked by Khmer Times what recommendations or advice she received from the presentation of ADB, IMF and AMRO at the meeting.
MEF’s Secretary of State Ros Seilava also told Khmer Times on the sidelines of the first session of the meeting Cambodia needs to further implement precautionary measures in response to the inflationary pressure, financial risks and monetary risks after there have been the case(s) of collapse in the US even though the Asian country has not been affected, especially IMF has recommended more serious implementation of existing international standards.
According to Seilava, IMF has advised the participants to pay higher attention to the enhancement of the implementation of Basel Accords I, II and III—a series of three international banking regulatory meetings that established capital requirements and risk measurements for global banks set by Basel Committee on Bank Supervision (BCBS).
Source: https://www.khmertimeskh.com/501290260/cambodias-economy-to-stay-healthy-says-imf/