Prime Minister Hun Sen appealed to international lending agencies to not increase interest rates on loans used for Cambodia’s development, adding that despite recent economic progress that has helped reduce poverty, the Kingdom needs low interest rate lending to continue growth.

Speaking to a crowd of nearly 15,000 garment factory workers, Hun Sen cited a recent World Bank report that showed that Cambodia had almost eradicated the levels of extreme poverty in the Kingdom. However, he urged that this success should not convince international lenders to consider raising interest rates.

“As a country moves out of poverty they confront different criteria for receiving grants and loan interest rates may increase for example from 1 percent to 5 percent,” he said, adding that Cambodia was still in need of concessional loans.

“Please, do not raise the interest rate on our loans, as Cambodia has not yet completely overcome its obstacles in development, and cannot repay loans with high interest rates.”

According to a World Bank report released earlier this week, Cambodia has reduced its levels of extreme poverty to the single-digits, becoming classified by the bank as an “out-of-extreme-poverty” country. However, the report said its middle class remains nearly nonexistent, and approximately half of its population is highly susceptible to economic shocks.

At the end of 2016, Cambodia had a total outstanding public debt of $5.8 billion, or approximately 29.3 percent of its GDP, according to the Cambodia Public Debt Statistical Bulletin.

China is by far the Kingdom’s largest creditor, as almost half of Cambodia’s outstanding debt is owed to this economic powerhouse. The Asian Development Bank (ADB) and World Bank are the second and third largest creditors, respectively, accounting for 19 percent and 9 percent of Cambodia’s total debt.