The Cambodian government registered a total public debt stock of $10.27 billion as of the end of the first quarter of 2023, up nearly three per cent from $9.99 billion three months earlier, according to the Ministry of Economy and Finance.

Just $42.45 million or 0.41 per cent of the public debt stock was domestic, while $10.23 billion or 99.59 per cent was external, of which 67 per cent and 33 per cent was held by bilateral and multilateral development partners (DP), respectively, the finance ministry said in its latest Cambodia Public Debt Statistical Bulletin.

The bulletin broke down the composition of the public debt stock by currency: 43 per cent USD (US dollars), 21 per cent SDR (special drawing rights), 12 per cent CNY (Chinese Yuan), 11 per cent JPY (Japanese Yen), seven per cent EUR (Euros) and six per cent KHR (Cambodian riel) and others.

SDRs are an interest-bearing international reserve asset based on a basket of currencies created by the International Monetary Fund (IMF) in 1969 to supplement other reserve assets of member countries. SDRs can be held by Cambodia as foreign reserve assets or exchanged with other IMF member countries for freely-usable currencies.

With a value determined daily based on market exchange rates, the SDR’s trade-weighted currency basket is currently composed of the US dollar, Euro, Chinese Yuan, Japanese Yen and Pound Sterling, in order of preference.

Meanwhile, the government in the first quarter penned new concessional loans with DPs to the tune of $488.31 million – equivalent to SDR 361.15 million or 21.24 per cent of the SDR 1.700 billion cap – with bilateral and multilateral partners respectively making up 34 per cent and 66 per cent of that amount, the bulletin said.

It said the total loan value marked a 54 per cent year-on-year increase, most likely in terms of US dollars, since a previous bulletin put the amount from first-quarter 2022 at $317.24 million or SDR 228.21 million.

“Overall, all the loans are highly concessional with an average grant element of around 40 per cent. The purpose of these new loan commitments is to finance public investment projects in the priority sectors that support long-term sustainable economic growth and increase economic productivity and production,” it added.

Speaking in the bulletin, Minister of Economy and Finance Aun Pornmoniroth assured that the public debt situation in Cambodia remains “sustainable” and at “low risk” of debt distress, despite external pressures.

“The sustainability of public debt hinges on Cambodia having a robust public debt management system in place,” he said.

The minister largely attributed the Kingdom’s rapid economic growth over the past two decades to the “sustainability, efficiency and effectiveness” of public debt management.

Speaking to The Post on June 15, Royal Academy of Cambodia economist Hong Vanak commented that the low-interest loans often granted to the Kingdom due to its developing-country status present a significant opportunity for the government to leverage credit in pursuit of development.

Construction projects and other developments – including roads, irrigation systems and additional infrastructure – completed in recent years are bringing in investors, generating employment, and boosting the economy, he claimed.

“I’ve also observed that the Cambodian government’s utilisation and management of debt have greatly improved,” Vanak remarked, affirming that the state repays creditors timely and “efficiently”.

The bulletin added that the government also issued a total of 100 billion riel or $24.67 million in sovereign bonds – which it noted is equivalent to about 12.30 per cent of the 813 billion riel cap – to finance public investment projects in a bid to promote economic growth and productivity.

In April, the IMF reported that Cambodia’s general government gross debt (GGGD) is projected to reach 37.5 per cent of GDP (gross domestic product) in 2023 – up from 36.5 per cent in 2022 – which, although marking the highest rate since 42.7 per cent in 2004, is lower than that of all but two ASEAN countries.

At a January 25 public forum, finance ministry permanent secretary of state Vongsey Vissoth shared that the Kingdom’s public debt per capita was “about $600”, compared to the US’ “nearly $100,000”, given its “over 120 per cent” public debt-to-GDP ratio – the IMF put the US’ GGGD-to-GDP ratio at 122.2 per cent in 2023, up from 121.7 per cent in 2022.

The IMF put the Kingdom’s 2023 GGGD-to-GDP ratio higher than those of ASEAN countries Brunei (2.3% – versus 2.1% in 2022) and Vietnam (36.3% vs 37.1% in 2022), but lower than those of Indonesia (39.1% vs 39.9%), the Philippines (56.7% vs 57.5%), Thailand (61% vs 60.5%), Malaysia (67% vs 66.3%), Myanmar (61.3% vs 63.9%) and Laos (123% vs 128.5%).

Timor-Leste, meanwhile, scored 16.7 per cent, versus 7.5 per cent in 2022.

Cambodia’s GGGD-to-GDP ratios for the 2024-2028 period were given as 38.8 per cent in 2024, 39.7 per cent in 2025, 40.4 per cent in 2026, 41.2 per cent in 2027, and 41.6 per cent in 2028 – the last of which is expected to exceed the rates of Brunei (1.9%), Timor-Leste (26.8%), Vietnam (31.3%) and Indonesia (37.3%), but remain lower than those of the other ASEAN nations.