Logo of Phnom Penh Post newspaper Phnom Penh Post - ‘60% of state savings’ to be spent on Covid

‘60% of state savings’ to be spent on Covid

Content image - Phnom Penh Post
Ministry of Economy and Finance secretary of state Vongsey Vissoth said at a public forum on macroeconomic management and the 2022 budget law on February 18. Hong Menea

‘60% of state savings’ to be spent on Covid

The government is on track to spend more than $2.127 billion or about three-fifths of Cambodia’s state savings of $3.5 billion over the 2020-2022 period to manage the impact of the Covid-19 crisis on key sectors, according to Ministry of Economy and Finance secretary of state Vongsey Vissoth on February 18.

At a public forum on macroeconomic management and the 2022 budget law, Vissoth noted that the government spent just $246 million from state savings in 2020 to cope with Covid, out of a planned $1 billion.

Last year however, the state spent $1.381 billion compared to the $800 million initially earmarked from the reserves, and plans to spend $500 million in 2022, he said.

Additionally, official figures indicate that the state’s total Covid-related spending reached $830 million in 2020 and “$1.3 billion” in 2021, and that more than $1 billion is planned for 2022.

Vissoth added: “The budget for 2022 has been increased, and we’ll have to spend more, although resources will be more limited as the ASEAN chairmanship could cost the Kingdom $40-50 million, and commune elections will set us back $70 million more.”

To cope with such expenditures, revenue collectors such as customs or taxation authorities must “do their best”, the senior finance official said.

Vissoth remains optimistic that unlike some of its peers, Cambodia will not need to resort to borrowing money from external sources to counter the crisis.

Hong Vanak, director of International Economics at the Royal Academy of Cambodia (RAC), told The Post that the decline in state budget resources poses a major risk given the lingering Covid-linked threats.

Moreover, other pressing issues such as inflation and rising fuel prices may require the government to make additional funds available, leading to even further increases in expenditures, he said.

Still, he believes that the government will be able to resolve any corresponding issues, given its more than two years of experience with the Covid-19 crisis.

“This is not a new crisis for us, so I think the state must have already planned to deal with the Covid-19 issue, which has affected a number of key areas such as SMEs [small- and medium-sized enterprises], tourism and services, as well as additional investment in agriculture,” he said.

With that perspective in mind, Vanak called on everyone to adhere to Covid-19 prevention guidelines and do their bit to reduce state spending on health, for available funds to be spent on other necessary matters.

From 2020-2021, the government rolled out 10 rounds of economic relief measures to manage the impact on key sectors from Covid-19 and the ongoing recovery process, and bolster economic growth during and after the crisis.

The associated funds were spent on support for the poor, subsidies for factory workers, health expenditures, and Covid-19 vaccine purchases, among other things.

MOST VIEWED

  • ‘Education’ a priority traffic-law penalty

    A top National Police official on June 21 neither rejected nor confirmed the authenticity of a leaked audio message, which has gone viral on social media, on a waiver of fines for a number of road traffic-related offences. General Him Yan, deputy National Police chief in

  • Pursat Ford assembly plant opens

    The Kingdom’s first Ford assembly plant was inaugurated on June 16 in Pursat province amid rising demand for brand-new vehicles among Cambodians. The facility is seen as a game changer for the domestic automobile industry, which could bring a wave of investors seeking to cash

  • Volunteer scheme to foster ‘virtuous’ humanitarian spirit

    A senior education official said volunteer work contributes to solidarity and promotes a virtuous humanitarian spirit among the youth and communities. Serei Chumneas, undersecretary of state at the Ministry of Education, Youth and Sport, made the comment during the opening of a training programme called “

  • Siem Reap’s $18M zoo said to educate public, help wildlife

    Angkor Wildlife and Aquarium Co Ltd has invested $18 million in a zoo in Siem Reap province, which will be opened in October to educate and promote animal conservation as well as attract national and international tourists. Currently, the Angkor Wildlife and Aquarium is building the

  • $50B infrastructure plan en route

    The government’s upcoming $50 billion,10-year infrastructure master plan will provide tremendous investment opportunities for domestic and foreign entities, transport experts and economists say. Minister of Public Works and Transport Sun Chanthol revealed the plan to Japanese ambassador to Cambodia Masahiro Mikami on June 15. At

  • Chinese firms unveil preliminary results on metro, monorail for capital

    Minister of Public Works and Transport Sun Chanthol and representatives from China Road and Bridge Corp (CRBC) and its parent company, the state-owned China Communications Construction Co Ltd (CCCC), met on June 24 for talks on results of the firms’ preliminary study on a potential metro