IMF urges Cambodia to accelerate reforms to boost competitiveness ahead of LDC graduation

PHNOM PENH, July 9, 2026 (KPT) — The International Monetary Fund has urged Cambodia to step up structural reforms to strengthen competitiveness and ensure sustainable growth as the country prepares to graduate from Least Developed Country status in 2029, warning that successful reform matters more than the milestone itself, officials said Wednesday.

Concluding its 2026 Article IV Consultation mission, IMF Mission Chief Kenichiro Kashiwase said Cambodia’s aspiration to graduate from LDC status was commendable, but stressed the government must prioritize reforms that underpin long‑term resilience.

“We support that aspiration,” he said. “But fundamentally, the government needs to ensure all these goals will be achieved in the meantime — not LDC status per se.”

Kashiwase called for full implementation of the Pentagonal Strategy and other national programs focusing on education, healthcare, infrastructure, logistics and governance to boost productivity.

He said improving the business climate, strengthening the rule of law, ensuring transparent regulations and lowering costs — particularly electricity prices — would be vital to attract investment amid rising global competition.

The IMF also urged Cambodia to strengthen domestic resource mobilization by broadening the tax base, improving compliance, increasing transparency in tax incentives and continuing public financial management reforms to safeguard fiscal sustainability.

Kashiwase noted Cambodia’s public debt remains sustainable, but said adherence to fiscal rules and transparent budget management will be critical to financing long‑term priorities. He added that reforms must be accelerated to ensure Cambodia’s economy is competitive and resilient as it moves toward graduation from LDC status.