Workers at an interchange construction site in Phnom Penh. Heng Chivoan
The government has disbursed $913.8 million concessional loans in the first half of 2023, which is an increase of 11 per cent compared to the same period in 2022, the Ministry of Economy and Finance announced.
In the second quarter of 2023, the government disbursed $647.02 million, according to the ministry’s Public Debt Statistical Bulletin, bringing the first half total to $913.8 million, 34 per cent or $312.3 million were from bilateral development partners (DPs) and 66 percent ($601.5 million) from multilateral DPs.
As of June 30, 2023, Cambodia’s total public debt stock, including old debt, amounted to $10.72 billion, of which 99.6 per cent or $10.67 billion is public external debt. Up to 64 per cent are from bilateral DPs and 36 per cent from multilateral DPs. The remaining 0.43 per cent or $42.5 million consists of public domestic debt.
The bulletin also showed that 53 per cent of disbursed amount was used for infrastructure programmes and 47 per cent for other priority non-infrastructure sectors. The infrastructure sector includes transportation, energy, irrigation, and clean water supply while the non-infrastructure comprises agriculture, health and education.
A further breakdown in the first half of 2023, revealed that debt service payments amounted to $247.4 million, where public external debt was $247.08 with principal sum being $191 million and interest and other fees $56.1 million. Public domestic debt stood at $290,000, it stated. The debt service payments rose 16 per cent year-on-year from the first quarter to the second quarter.
Concessional loans have more favourable terms than market or commercial loans, with a grant element of 35 per cent or more.
Hong Vannak, an economist at the Institute of International Relations at the Royal Academy of Cambodia, told The Post that concessional loans support socio-economic development. Concessional loans play an important role in helping governments of developing countries with budgeting to develop human resources and infrastructure to boost economic growth.
“In my observation, the use of government concessional loans in the past has been good, precise, efficient and transparent,” he said on September 28.
Minister of Economy and Finance Aun Pornmoniroth said Cambodia’s current public debt is manageable, sustainable and at low risk although its economy was impacted by Covid-19 and other external factors.
