Wednesday, December 09, 2009
ABC Radio Australia
The International Monetary Fund has called on Cambodia to strengthen its banking system as the country struggles to pull out of a deep recession.
An IMF report - issued after talks with Cambodian authorities - says the recession and a sharp decline in property prices have further weakened the banks.
Now as the economy recovers, the IMF says Cambodia should safeguard its macroeconomic stability and reinforce the banking system.55555555555555555<
The IMF projects Cambodia's economy will contract by 2.7 per cent this year before recovering to a growth of 4.3 per cent in 2010.
Cambodia had enjoyed strong growth in the years leading up the global financial crisis.
"Following a decade of high economic growth - 8.0 per cent per year on average -- and significant poverty reduction, Cambodia's economy has been hard hit by the global crisis," the IMF said.
Plunges in the export and tourism sectors also caused a slowdown in construction, which along with falling agriculture prices, depressed rural incomes in one of the world's poorest countries.
A shrinking economy and declining property prices have exacerbated strains caused by weak risk management, earlier supervisory lapses, and excessive credit growth.
The IMF encouraged Cambodia to continue strengthening its banking supervision.
"Immediate priorities should include strict enforcement of the new asset classification regime, prompt implementation of corrective action plans, development of a comprehensive bank restructuring framework, and increased supervision capacity," it said.
An IMF report - issued after talks with Cambodian authorities - says the recession and a sharp decline in property prices have further weakened the banks.
Now as the economy recovers, the IMF says Cambodia should safeguard its macroeconomic stability and reinforce the banking system.55555555555555555<
The IMF projects Cambodia's economy will contract by 2.7 per cent this year before recovering to a growth of 4.3 per cent in 2010.
Cambodia had enjoyed strong growth in the years leading up the global financial crisis.
"Following a decade of high economic growth - 8.0 per cent per year on average -- and significant poverty reduction, Cambodia's economy has been hard hit by the global crisis," the IMF said.
Plunges in the export and tourism sectors also caused a slowdown in construction, which along with falling agriculture prices, depressed rural incomes in one of the world's poorest countries.
A shrinking economy and declining property prices have exacerbated strains caused by weak risk management, earlier supervisory lapses, and excessive credit growth.
The IMF encouraged Cambodia to continue strengthening its banking supervision.
"Immediate priorities should include strict enforcement of the new asset classification regime, prompt implementation of corrective action plans, development of a comprehensive bank restructuring framework, and increased supervision capacity," it said.
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