PHNOM PENH (Xinhua): The International Monetary Fund (IMF) said on Monday that the Cambodian economy is projected to grow by 5.5 per cent in 2024, up from 5 percent in 2023, driven by a strong rebound in garment and agricultural exports and the ongoing recovery in tourism.
"However, the construction and real estate sectors are going through a correction, following rapid growth in prior years," Kenichiro Kashiwase, IMF mission chief for Cambodia, said at the conclusion of a visit to Cambodia from Sept. 17 to 30.
Credit growth has sharply slowed amidst deteriorating asset quality and high private sector debt, he said, adding that in the first quarter of 2024, non-performing loans (NPLs) rose to 6 per cent of total loans, reflecting emerging vulnerabilities with the temporary roll-back of the Covid-19 forbearance measures.
Kashiwase said risks to the outlook have shifted to the downside, notably due to weaker-than-projected demand from advanced economies, geoeconomic fragmentation, and high domestic private debt.
"Rising NPLs in the tourism and real estate sectors also pose risks to growth and financial stability," he said. "On the upside, a continued loosening of global financial conditions would support the recovery."
Kashiwase said inflation has moderated to an average of 1.6 per cent year-on-year in the first half of 2024, down from 2.1 per cent in 2023, reflecting global commodity price trends and weak domestic demand growth.
"For the full year, inflation is projected to reach around 1.5 percent before converging towards the long-term trend of 3 percent," he said. - Xinhua
