Accoording to the 2023 national budget, the government will allocate around $2.3 billion to increases in the salaries of civil servants, medics, teachers, officials and members of the armed forces, with the minimum salary of more than 1.1 million riel ($260) bumped up to more than 1.3 million riel.
The minimum salaries of contract officials will be increased to 710,000 riel, their first pay increase since before the onset of the Covid-19 pandemic.
At a recent public forum on “Macroeconomic Management and Budget Law 2023”, Ministry of Economy and Finance secretary of state Vongsey Visoth said that 2022 marked a difficult year for Cambodia as it was a year of slow growth.
However, this year the government is still increasing spending in some key sectors, especially for the increase in salaries for civil servants.
“This year, spending on education and health has increased. The salaries of civil servants generally increase by 10 per cent. Pensions also increase, with older civil servants who were receiving low pensions due to their low salaries now receiving more,” he said.
Royal Academy of Cambodia economics researcher Ky Sereyvath said that the increase in the salaries of civil servants is a fiscal policy to boost growth. Although the burden is small, it could promote economic growth and tax revenues.
“As the salaries increase, so does the payroll tax. It means that if the government injects, say, $100 million into civil servants’ salaries, it could increase a hypothetical $300 million contribution to the country’s GDP up to $500 million,” he said.
From January 2023, the government increased the minimum salary of civil servants from 1.17 million riel to 1.30 million riel. The minimum salaries of teachers and medics were increased from 1.27 million riel to 1.40 million riel. The salaries of police have been increased from 1.25 million to 1.38 million riel. The salaries of soldiers with the rank of private have been increased from 1.12 million to 1.25 million riel.