Thailand
Cambodia remains at low risk of debt distress
Cambodia’s public debt is still evaluated as controllable with a low risk of distress despite the country’s economy having been impacted by the Covid-19 pandemic and other external factors.
As of the end of 2022, including the old debt, the Cambodian government has a total public debt of $9.99 billion, in which 99.82 percent or $9.97 billion in public external debt from bilateral developing partners and multilateral developing partners, and $17,51 million was domestic debt, according to the Cambodia Public Debt Statistical Bulletin.
The bulletin, released by the Ministry of Economy and Finance, said Cambodia signed to borrow $4,001 million from China, $1,077 million from Japan, $482 million from the Republic of Korea, $473 million from France, and $28 million from Thailand.
Regarding loans from multilateral agencies, the Kingdom borrowed $2,050 million from the Asian Development Bank, $933 million from the World Bank, $129 million from the International Fund for Agricultural Development, $84 million from European Investment Bank, $2 million from OPEC Fund for International Development, $7.9 million from Nordic Development Fund, and $6.6 million from the Asian Infrastructure Investment Bank.
All the loans are highly concessional with an average grant element of around 41 percent, it said, adding that the purpose of the loans is to finance public investment projects in the priority sectors that support long-term sustainable economic growth and increase productivity.
The present value of external debt to GDP was 24.9 percent compared to the threshold of 40 percent.
“Despite being impacted by the Covid-19 and other external factors, Cambodia’s public debt situation continues to remain “sustainable” and “low risk” of debt distress. All the key debt indicators in 2022 are well below the thresholds. The main debt indicator, the Present Value of Public and Publicly Guaranteed External Debt to GDP, is at 24.9 percent compared to the 40 percent threshold,” the bulletin said.
Maintaining sustainable public debt is because Cambodia has a strong public debt system through a series of sharpened reforms, said Aun Pornmoniroth, Minister of Economy and Finance.
“Sustainable and efficient public debt management has made a significant contribution to achieving proud economic growth over the past two decades, as well as enabling Cambodia to be able to mobilize more concessional credit to meet the financial needs of the priority sectors,” Moniroth said in the bulletin.
According to the bulletin, in 2022, the government has paid debt services to development partners to the tune of $464 million.
For 2023, the government plans to raise $200 million from bonds, which can provide direct revenue and ensure investment efficiency and sustainability of debt management and the national budget.
The government has raised only some $17 million from government bonds, which issuance started in October last year.
Moniroth has previously said that sovereign bonds will allow the government to raise funds for socio-economic development projects.
Source: https://www.khmertimeskh.com/501254284/cambodia-remains-at-low-risk-of-debt-distress/