The International Monetary Fund (IMF) on Dec. 8, called on Cambodia to strengthen its banking system to minimise loss from the impacts of the global economic crisis.

IMF appealed to the country after the institution held talks with the Cambodian government on Nov. 18.

As the economy recovers, immediate priorities include safeguarding macroeconomic stability and reinforcing the banking system with more than 20 operating banks, the Washington-based institution said.

IMF executive directors noted that the global recession has contributed to a contraction in economic activity, projecting that Cambodia's economy will deflate to a 2.7 percent annual rate this year compared to the average 8 percent in previous years before recovering to an expected gross domestic product (GDP) increase of 4.3 percent in 2010.

Cambodia’s economy has been hit hard by the global financial crisis that erupted in 2007, especially in its tourism and export sector because of lower global demand.

IMF noted that lower foreign inflows have spurred a decrease in construction activity and falling agricultural commodity prices have depressed rural incomes.

However, the institution praised the Cambodian government for taking measures to minimise the impacts of the crisis, including implementing stimulus package, supporting export activities and creating jobs for redundant labour./.