THE International Monetary Fund has warned Cambodia’s export reliance on the United States and European markets is a “significant risk” to the Kingdom’s continued financial recovery.
While the IMF was upbeat in its yearly economic assessment of the Kingdom about a turnaround in growth since 2009, saying an export-led recovery was underway, it cautioned that significant risks “continue to cloud growth prospects”.
“The fragility of the global recovery exposes Cambodia’s narrow export base with its heavy reliance on the US and European markets to significant downside risks,” the annual report released late on Monday said.
It encouraged the government to continue to improve tax collection efforts, calling it “the best hope for Cambodia to meet the dual objective of securing fiscal sustainability and mobilising resources for its development needs”.
It recommended increasing the incentives for people to use the riel over the US dollar, describing de-dollarisation as a critical step towards monetary independence.
The IMF said it expected Cambodia’s gross domestic product growth to rise gradually to between 6 and 7 percent “over the medium term”.