This paper outlines the major aspects of Cambodia’s recent macroeconomic performance, particularly the developments in 2007. It also reviews the policy developments and reform initiatives being undertaken in the financial sector and in public finance, particularly public financial management. The success in implementing financial sector reform will be crucial for integrating Cambodia’s rapidly modernizing economy with the rest of the world. Effectiveness and efficiency in resource mobilization and public service delivery lie at the heart of the reform of public finance. The progress in achieving the MDGs and strengthening infrastructure can be sustained only if public finance reform proceeds as planned. Hence the prospects of sustaining Cambodia’s economic growth are closely tied to the successful implementation of reforms in these two areas.
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