Information about Asia and the Pacific Asia y el Pacífico
Journal Issue

Cambodia: Staff Report For The 2011 Article IV Consultation—Informational Annex

International Monetary Fund
Published Date:
February 2012
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(As of December 31, 2011)

Membership Status

Joined December 31, 1969; accepted the obligations under Article VIII, Sections 2, 3, and 4 on January 1, 2002.

General Resources Account

SDR MillionPercent Quota
Fund holdings of currency87.50100.00

SDR Department

SDR MillionPercent
Net cumulative allocation83.92100.00

Outstanding Purchases and Loans

SDR MillionPercent Quota

Latest Financial Arrangements

In millions of SDRs (mm/dd/yyyy)


Extended Credit Facility (ECF); formerly PRGF.

Extended Credit Facility (ECF); formerly PRGF.

Projected Payments to the Fund

In millions of SDRs (based on existing use of resources and present holdings of SDRs)


Multilateral Debt Relief Initiative

As part of the Multilateral Debt Relief Initiative (MDRI), the IMF Executive Board on January 5, 2006 approved relief on 100 percent of debt incurred by Cambodia to the IMF before January 1, 2005. This resulted in the forgiving of all of Cambodia’s outstanding debt to the IMF, a total of SDR 56.8 million (about US$82 million). The authorities intend to spend the resources over a number of years, initially on rural irrigation projects. The National Bank of Cambodia (NBC) transferred the full MDRI proceeds to the Ministry of Economy and Finance effective March 2006.

Safeguards Assessment

A voluntary safeguards assessment of the NBC was completed in January 2010 at the request of the authorities. The assessment updated the previous voluntary assessment completed in March 2004. The assessment found that the NBC had taken steps to strengthen aspects of its safeguards framework, although important measures proposed in 2004 are still outstanding or in progress. Some new risks have emerged in the area of external audit. The assessment made appropriate recommendations.

Exchange Rate Arrangement and Payments System

Cambodia’s exchange regime is classified as stabilized. The official exchange rate, which is expressed in riels per U.S. dollar, applies to all official external transactions conducted by the central government and state enterprises, and is used for accounting purposes by the NBC. It is determined by the foreign exchange market, with the official rate adjusted to be within 1 percent of the market rate on a daily basis.

Cambodia accepted the obligations of Article VIII, Sections 2, 3, and 4 on January 1, 2002. Cambodia maintains an exchange system that is free of restrictions on the making of payments and transfers for current international transactions.

Article IV Consultation

Cambodia is on the standard 12-month Article IV consultation cycle. The last Article IV consultation discussions were held in Phnom Penh during August 30–September 10, 2010. The Executive Board discussed the staff report (IMF Country Report 11/45) and concluded the consultation on October 29, 2010.

Financial Sector Assessment Program (FSAP)

The joint IMF-World Bank FSAP mission took place in March 2010 and the assessment was completed in October 2010.

Technical Assistance

Technical assistance is currently focused on bank supervision, monetary operations, public financial management, customs administration, financial sector supervision, and macro-financial statistics. Delivery is through a resident advisor at the NBC, peripatetic experts, and short-term visits from headquarters.

Resident Representative

The new IMF Resident Representative in Phnom Penh (Mr. Faisal Ahmed) was appointed in July 2011. From July 2010 to June 2011, the IMF’s Resident Representative for Indonesia (Mr. Milan Zavadjil) also assumed the responsibilities for the Cambodian IMF office.


(December 2011)

The Bank and the IMF country teams for Cambodia, led by Mr. Mathew Verghis (Lead Economist, EASPR) and Mr. Olaf Unteroberdoerster (IMF Mission Chief for Cambodia). maintain a close working relationship and have an active dialogue on a range of macroeconomic and structural issues.

Recent key areas of cooperation and coordination include:

  • Macroeconomic policy advice to the authorities. The IMF and the World Bank staffs have consulted each other on key macroeconomic policy messages to the authorities to avoid sending conflicting messages. The staffs adopted a joint stance on the complex question of the 2009 national accounts. The two teams also regularly share information outside missions, and discuss and exchange institutional views on key macroeconomic developments. Bank staff share and discuss the monthly fiscal monitor, translated Budget Law (English version) and the quarterly review of macroeconomic developments. IMF staff share policy notes and other mission preparatory documents.

  • Financial sector reform/TA and FSAP. World Bank and IMF teams have worked closely together while undertaking the March 2010 FSAP. The two teams sent respective representatives jointly in 2009 to appraise the authorities about the purpose, structure, output, and requirements of an FSAP. The two teams also regularly communicated on financial sector developments throughout the assessment. The FSAP was completed in October 2010. Following the recommendations by the FSAP, it is expected that technical assistance (TA) will be deployed in subject areas akin to the FSAP and close coordination between the IMF and the World Bank will continue.

  • Public financial management and tax and customs administration reform. Both institutions are working to strengthen coordination of work on public financial management, and tax and customs administration reform. Both teams share as much as possible the work done in this area.

  • Article IV consultations. IMF Article IV consultations regularly share their macroeconomic data with the World Bank and hold working sessions to try and reconcile macroeconomic data sets. The collaboration is closest on the debt sustainability analysis, a joint product, but extends more broadly into other areas of the consultation as well. This is extremely important for both institutions in Cambodia’s scarce data context. World Bank staff are also invited to and do participate in some of the key meetings.

  • Structural reforms. The IMF staff and the World Bank teams have worked together to share views on a range of other issues, including structural reforms for a better investment climate (and competitiveness issues), customs modernization, rural development, and de-dollarization.

The new Resident Representative (Mr. Faisal Ahmed) was appointed in July 2011. The presence of a locally-based representative has further deepened collaboration on economic and debt sustainability analysis and the IMF’s involvement on the Public Financial Management Reform Program.

Based on the above intensive partnership, the World Bank and the IMF share a common view about Cambodia’s macroeconomic and structural reform priorities. These include:

  • Sustaining the recovery. As of December 2011, a broad-based recovery is well under way. However, it needs to be sustained with appropriate fiscal consolidation and continued management of the banking sector risks, against the backdrop of global uncertainty.

  • Building foundation for stronger growth. After steadily rising from the mid-1990s, potential growth appears to be slowing. Removing impediments to investments would be the key to promote stronger growth.

  • Creating fiscal space. Macroeconomic stability critically depends on prudent fiscal policies. Fiscal space to address near-term downside risk is limited and greater fiscal consolidation efforts are needed to rebuild space, including through improving revenue administration, prioritizing spending, and better monitoring of contingent liabilities.

  • Building credibility for greater monetary independence. Normalizing monetary conditions would guard against macrofinancial risks and signal a strong commitment to de-dollarization, along with progress to develop an interbank market and upgrade the NBC’s liquidity monitoring.

  • Managing financial deepening. Implementing the key recommendations of the 2010 FSAP would be critical to safeguard financial stability. These include implementing a moratorium on new bank licenses, developing the foreign exchange market in conjunction with the recently created stock market, and strengthening the financial system supervision.

  • Improving governance. Both the World Bank and IMF have stressed the critical role of governance in improving the quality of service delivery and the business environment.

The teams are committed to continue the close cooperation going forward. The table below details the specific activities planned by the two country teams over the next 12-month period along with their expected deliveries.

Cambodia: Joint Managerial Action Plan, December 2011–December 2012
TitleProductsProvisional and

Actual Timing

of Missions
Expected and Actual

Delivery Date
A. Mutual Information on Relevant Work Programs
The World Bank’s Work program in the next 12 MonthsMacroeconomic monitoringApprox. once every six months
  • Semi-annual updates (regional)

  • Recent economic developments (slides)

Financial sector
  • FSAP follow up

Public sector management
  • Public Financial Management Reform Program (PFMRP)

Project closing date is

Jan. 15, 2013
  • Trade Facilitation and Competitiveness Program (where customs automation is the biggest component)

Dec. 2011Project closing date is

June 1, 2012
  • Trade Development Support Program

March 2013 and likely to be extended to March 15
The IMF’s Work Program in the next 12 MonthsMacroeconomic policy analysis and advice
  • 2011 Article IV consultation

3rd Quarter 2011December 2011
  • 2012 Article IV consultation

4th Quarter 2012
  • Policy notes on request

Technical assistanceOngoing
  • Fiscal: Cash management, government accounting, budget classification, macro-fiscal capacity building

  • Financial sector: FSAP follow-up work, resident banking supervision advisor, consolidated supervision

  • Statistics: National accounts, price, balance of payments

B. Agreement on Joint Products and Missions
Joint Products in the next 12 Months
  • Debt sustainability analysis

2011 and 2012 Article IV

During Article IV

  • FSAP

The FSAP was completed in October 2010. Follow-up work and TA are ongoing.


(December 2011)

From 1992 through December 2011, the Asian Development Bank (AsDB) approved funding of US$1,433.51 million including 56 loan projects of US$1,174.8 million with low interest, and 22 Asian Development Fund (ADF) grants of US$258.71 million to Cambodia for structural reform programs and development projects. To date, 39 loan projects for a total of US$882.54 million and 5 ADF grants of US$56.51 million have been completed.

The sector composition and loan/grant amount of the remaining active portfolio as of December 2011 is as follows: (i) agriculture and natural resources, US$158.5 million; (ii) education, US$51.6 million; (iii) energy, US$20.0 million; (iv) finance, US$30.0 million; (v) health, nutrition, and social protection, US$10.0 million; (vi) public sector management, US$55.1 million; (vii) transport and communication, US$148.26 million; and (viii) water supply, sanitation, and waste management, US$21.0 million.

The AsDB’s overarching goal in Cambodia is inclusive and diversified economic growth and poverty reduction. The AsDB’s Country Partnership Strategy ((CPS) 2011–13), endorsed in July 2011, supports implementation of the government’s updated National Strategic Development Plan 2009–13 (NSDP Update)1 and focuses on poverty reduction and inclusive growth with an integrated approach to rural development; on the promotion of urban-rural linkages (including connectivity); and the enhancement of human capital by improving rural water supply and sanitation, and access to quality general education and industry-relevant technical and vocational education and training (TVET). The CPS 2011–13 prioritizes five sectors: (i) transport; (ii) water supply, sanitation, and urban development; (iii) agricultural and natural resources; (iv) education and training; and (v) finance, as well as a facilitating sector, public sector management. The CPS also identifies four critical country challenges of climate change, decentralization, rural-urban linkages, and regional cooperation. The CPS incorporates five key cross-cutting themes into all activities—private sector development, governance, gender equity, knowledge solutions, and partnerships.

The AsDB’s geographical focus remains the Tonle Sap basin where the CPS supports sustainable natural resource use and management; stimulates the growth of competitive farms and rural enterprises; builds sustainable rural infrastructure, including irrigation, to strengthen productivity, market connectivity, and competitiveness; and improves food security and climate resilience in agricultural production. AsDB interventions on transport will focus on expanding the provincial and rural roads network to promote connectivity and trade and tourism activities in Cambodia and the Greater Mekong Sub-region (GMS).

The AsDB will continue its support for the Cambodia Millennium Development Goal targets for improved water supply and sanitation for the large number of people without access in urban and rural areas. In urban areas, we will work to manage the challenges of rapid urbanization and provide basic services and infrastructure to meet the needs of the poor and stimulate the growth of value chains. The AsDB will develop urban environmental infrastructure (drainage, water supply, and sanitation, as well as selective infrastructure to improve the business environment) in border towns and secondary growth centers around the Tonle Sap basin. In education and training, the AsDB will concentrate on the completion of nine years of basic education, leading to further education and training by promoting equitable access and quality and focus on formal and informal TVET for men and women to respond to labor market needs and the demands of business, and to improve rural incomes.

In finance, the AsDB will continue its leading role in the financial sector to (i) consolidate the banking reforms achieved to date, upgrade financial infrastructure, and strengthen the regulatory capability of the National Bank of Cambodia; (ii) support microfinance expansion through regulatory and institutional reforms, and consider appropriate reforms to stimulate SME finance; and (iii) support ongoing reforms to develop the insurance industry. The AsDB will support implementation of the recently updated Financial Sector Development Strategy (2011–20). The CPS also includes support for government measures to deepen public sector management reform and strengthen anticorruption measures. For decentralization and deconcentration, the AsDB will support the program-based approach under the three-year implementation plan (2011–13) in functional assignments, fiscal decentralization (including public financial management capacity development), and subnational financing mechanisms such as the Sub-National Investment Facility.

In the area of private sector development, the AsDB assists the government’s efforts in improving competition policy and regulatory efficiency; strengthening the investment climate and innovation; continuing trade policy reforms and trade facilitation (customs and sanitary and phytosanitary standards for food safety); and leverage public-private partnership opportunities. Assistance has also been provided to help the government improve its competitiveness at the GMS level through reducing border-related costs and distortions; improving physical infrastructure; enhancing transport and trade facilitation, including promoting compliance with SPS standards. Later interventions would be more focused on improving the trade facilitation and logistical links to the subregion as systems and procedures become more developed and integrated.

Asian Development Bank: Loan/Grant Commitments and Disbursements to Cambodia, 1992–2011

(In millions of U.S. dollars, as of December 5, 2011)

Loan/GrantContract Awards/

US$10 million loans and US$42 million grants approved in 2005.

US$62 million loans and US$7.8 million grants approved in 2006.

US$27.1 million loans and US$37 million grants approved in 2007.

US$53.8 million loans and US$30.3 million grants approved in 2008.

US$71.7 million loans and US$72.8 million grants approved in 2009.

US$95.0 million loans and US$65.8 million grants approved in 2010.

US$67.0 million loans and US$3.0 million grants are expected to be approved in 2011.

US$10 million loans and US$42 million grants approved in 2005.

US$62 million loans and US$7.8 million grants approved in 2006.

US$27.1 million loans and US$37 million grants approved in 2007.

US$53.8 million loans and US$30.3 million grants approved in 2008.

US$71.7 million loans and US$72.8 million grants approved in 2009.

US$95.0 million loans and US$65.8 million grants approved in 2010.

US$67.0 million loans and US$3.0 million grants are expected to be approved in 2011.


(December 2011)

Assessment of Data Adequacy for Surveillance

General. Data provision is broadly adequate for surveillance. Extensive TA has been provided by the IMF, UNDP, AsDB, and World Bank, as well as from bilateral partners (namely, Japan and Sweden), leading to substantial capacity improvements in compiling and reporting macroeconomic statistics. Currently, Cambodia is participating in STA’s Project on the Implementation of the System of National Accounts and International Comparison Program, funded by the government of Japan. This project will provide TA to build statistical capacity and improve both national accounts and price statistics. However, various shortcomings in macroeconomic data still hamper timely and comprehensive analysis.

National accounts. Though major improvements have been implemented in recent years, weaknesses remain in the quality and timeliness of data. With IMF assistance, the National Institute of Statistics (NIS) continues working to improve the quality of national accounts statistics in accordance with the System of National Accounts 1993, to expand the scope of annual national account aggregates, and to produce a quarterly national accounts series beginning with June 2005. The quality of GDP estimates remains hampered by the lack of comprehensive and reliable source data on a production and expenditure basis, in part stemming from the need to address resource constraints and improve data collection techniques. The authorities have published the 2009 and 2010 national accounts; however, a TA mission that visited Cambodia in November 2011 noted inconsistencies in the 2009 data that should be addressed. The November 2011 mission assessed current methodologies used to compile national accounts estimates and provided support with the development of the quarterly national accounts estimates. Follow up TA missions within the three-year STA project will focus on improving the accuracy of the annual and quarterly GDP and expanding the scope of the national accounts.

Price statistics. The compilation of the consumer price index (CPI) suffers from insufficient coverage. A CPI series was introduced starting in January 2009. Geographic coverage of the series is limited to urban households in Phnom Penh. Statistics Sweden is currently providing assistance with the household budget survey and, on an intermittent basis, the CPI. An STA TA mission visited Phnom Penh in August/September 2011 to assist with updating/improving the CPI. Pending the approval of additional budgetary resources, it is planned that the updated CPI will include expanded geographic coverage. The authorities indicated a need for assistance with developing a producer price index (PPI), but no funds have been allocated to support the compilation of an ongoing PPI.

Government finance statistics. The Ministry of Finance and Economy began implementing reforms to the government accounting system and budgetary nomenclature in 2007, based on the Government Finance Statistics Manual (GFSM) 2001, with IMF TA. In addition, several STA missions have assisted with GFS compilation procedures within the GSFM 2001 framework. IMF TA in April 2008 assisted with establishing a bridge between the government’s new chart of accounts (COA) and the GSFM 2001 classifications so that accounting records can be used as source data in compiling GFS. However, use and coverage of the COA has been limited and not fully integrated to activities such as the disbursement of external loans and grants, the government’s budget reserve fund, and capital expenditures.

Monetary and financial statistics. The NBC compiles the balance sheet and survey for the central bank and other depository institutions in accordance with the IMF’s Monetary and Financial Statistics Manual. Since August 2005, the NBC has reported monthly monetary and financial statistics to STA using the Standardized Report Forms. The NBC received TA during the FSAP on the compilation of financial soundness indicators (FSIs). The NBC now compiles monthly core FSIs and shares them with IMF staff irregularly. The nonreliability and inconsistency of data reported by banks still poses a challenge to the interpretation of FSIs.

External sector statistics. Despite recent improvements, more work is needed to improve balance of payments statistics. Customs data have substantial coverage and valuation problems arising from the use of reference prices and limited recording of nondutiable imports, underreporting of re-exports, and weaknesses in customs controls. Enterprise transactions, such as payment for imported services, income payments, and portfolio investment abroad are excluded or underreported. Foreign direct investment, which is believed to be large, relies excessively on approvals, and gaps exist with respect to large build-operate-transfer projects in the energy sector. Gaps also exist in external debt statistics, in particular, on the stock of public and publicly guaranteed debt by maturity, on bilateral donor disbursements, and on external debt service. Gaps exist in official transfers (e.g., grants) and in external statistics, and no data are available for private external debts.

Data Standards and Quality

Cambodia participates in the IMF’s General Data Dissemination System. No data ROSC are available.

Cambodia: Table of Common Indicators Required for Surveillance

(As of December 2011)

Date of









Exchange Rates12/23/ 201112/30/ 2011DDW
International Reserve Assets and Reserve Liabilities of the Monetary Authorities211/201112/2011BiweeklyBiweekly, 4 week lagN/A
Reserve/Base Money11/201112/2011MM, 4-6 week delayM
Broad Money11/201112/2011MM, 4-6 week delayM
Central Bank Balance Sheet11/201112/2011MM, 4-6 week delayM
Consolidated Balance Sheet of the Banking System11/201112/2011MM, 4-6 week delayM
Interest Rates311/201112/2011MM, 4-6 week lagM
Consumer Price Index11/201112/2011MM, 2-1 week lagM
Revenue, Expenditure, Balance and Composition of Financing4—General10/201112/2011MM, 4-6 week lagM
Revenue, Expenditure, Balance and Composition of Financing4—Central10/201112/2011MM, 4-6 week lagM
Stocks of Central Government and Central Government-Guaranteed Debt6201009/2011AA, 6 month lagA
External Current Account Balance06/201109/2011QQ, 3 month lagQ
Exports and Imports of Goods and Services06/201109/2011QQ, 3 month lagQ
GDP/GNP201009/2011AA, 6 month lagA
Gross External Debt11/201112/2011MM, 4-6 month lagA
International Investment Position706/201109/2011QQ, 3 month lagQ

Daily (D), Weekly (W), Monthly (M), Quarterly (Q), Annually (A), Irregular (I), and Not Available (N/A).

Includes reserve assets pledged or otherwise encumbered as well as net derivative positions.

Both market-based and officially-determined, including discount rates, money market rates, rates on treasury bills, notes and bonds.

Foreign, domestic bank, and domestic nonbank financing.

The general government consists of the central government (budgetary funds, extra budgetary funds, and social security funds) and state and local governments.

Including currency and maturity composition.

Includes external gross financial asset and liability positions vis-à-vis nonresidents.

Daily (D), Weekly (W), Monthly (M), Quarterly (Q), Annually (A), Irregular (I), and Not Available (N/A).

Includes reserve assets pledged or otherwise encumbered as well as net derivative positions.

Both market-based and officially-determined, including discount rates, money market rates, rates on treasury bills, notes and bonds.

Foreign, domestic bank, and domestic nonbank financing.

The general government consists of the central government (budgetary funds, extra budgetary funds, and social security funds) and state and local governments.

Including currency and maturity composition.

Includes external gross financial asset and liability positions vis-à-vis nonresidents.


National Bank of Cambodia (

Exchange rates

Consumer Price Index

Interest rates

Monetary Survey

Credit granted by deposit money banks and nonbank financial institutions

Balance of payments

Exports and imports

Visitor arrivals

Ministry of Economic and Finance (

Government budget

Fiscal revenue, expenditure, and financing



National Institute of Statistics (

Consumer Price Index

National accounts

Population census

Labor force survey

Socioeconomic survey

Household survey

The National Strategic Development Plan (NSDP) update is available at:

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