IMF urges more efforts to cool rapid credit growth
Rapid credit growth continues to pose a risk to financial stability in Cambodia, requiring more regulation to reduce the impact of a possible economic downturn and more adequate assessments of loan defaults in at-risk sectors, the International Monetary Fund said in its latest Article IV consultation report. The IMF published its recommendations for the Cambodian economy on November 4 following a consultation it carried out in October. Looking at both internal and external risk factors, the report listed US interest rate hikes, uncertainty from Brexit, the Chinese economic slowdown and a high level of dollarisation in Cambodia as some of the main challenges facing the Kingdom’s economy. Credit lending is developing into another risk given its prolonged and rapid growth, aided by low levels of regulation, the report said. Year-on-year private sector credit growth reached 30 percent this year, leading to a credit-to-GDP ratio of 62 percent, IMF figures showed.
