PHNOM PENH, June 21 (Xinhua) -- The World Bank has approved 275 million U.S. dollars in credit to support Cambodia's efforts to promote long-term economic growth and resilience, the lender said in a news release on Friday.

The financing will promote reforms that boost private sector competitiveness, strengthen the country's fiscal position and provide assistance to the most vulnerable.

"While Cambodia's economy has recovered from the impacts of the COVID-19 pandemic and subsequent shocks, the focus is now shifting toward achieving sustained high quality growth," said Maryam Salim, World Bank country manager for Cambodia.

"This new operation will boost private sector competitiveness, strengthen the government's fiscal position, provide assistance to the most vulnerable Cambodians," she added.

The COVID-19 pandemic led to Cambodia's first economic contraction in 25 years, the news release said, adding that the economy has since recovered, though growth has not returned to its pre-pandemic trend.

The situation reflects both the global economic slowdown and structural challenges to the country's growth model, the news release said.

Cambodia's structural challenges include weak productivity growth, low human capital formation and barriers to private business formation and competition, it added.

The new operation supports reforms to address challenges, the news release said, adding that it will help create an environment in which firms can enter, exit and compete fairly.

The operation will also facilitate the timely provision of relief to a broader set of vulnerable households in the event of natural disasters or economic shocks, improve environmental regulation and bolster disaster risk management, it said. ■