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Cambodia Maintains a Sustainable Public Debt Profile

Phnom Penh, March 18, 2024 – The Ministry of Economy and Finance of Cambodia has disclosed in its latest 2023 report that the nation's public debt profile is sustainable and poses a low risk of distress. Ending 2023, Cambodia’s total public debt is calculated at US$11.24 billion, with external public debt accounting for 99.5% (US$11.19 billion) and domestic public debt making up the remaining 0.5% (US$52.39 million).

The debt composition is diversified, consisting of 46% in USD, 19% in Special Drawing Rights (SDR), 11% each in CNY and JPY, 7% in EUR, with the remainder in local and other currencies. The Ministry emphasized, “Cambodia’s public debt status continues to be sustainable and presents a low risk of distress. The key debt indicators for 2023 comfortably sit well below international thresholds, notably with the Present Value of Public and Publicly Guaranteed External Debt to GDP at 24.2%, under the 40% threshold.”

Further, the report highlights the Royal Government of Cambodia’s new concessional loans totaling US$1.81 billion for 2023, equivalent to SDR 1,339.22 million. This accounts for 79% of the lawful ceiling of SDR 1,700 million. These loans aim to fund public investment projects in critical sectors, bolstering long-term sustainable economic growth and enhancing economic productivity.

The bulletin accentuates the highly concessional nature of these loans, which carry an average grant element of around 45%. This reflects the government’s prudent borrowing strategy and its focus on leveraging debt for productive and sustainable development.

Prime Minister Hun Manet remarked on the nation's commitment to public finance management reforms, aligning Cambodia's financial governance with international standards. “Public financial management has significantly bolstered the government's accountability for the nation's destiny, mitigating the dependency on foreign borrowing,” he stated during the 2023 Annual Review Meeting on Public Financial Management Reform Programme-Stage 4 on February 14.

The Prime Minister further highlighted that the country’s sovereign status remains intact despite leveraging foreign loans for infrastructural investments aimed at fueling the national economy. This approach underscores Cambodia's responsible management of foreign debt, ensuring it serves the broader objective of national economic development without compromising the nation’s autonomy.

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