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Ministry of Economy Implements Austerity Measures for Late 2024

PHNOM PENH, June 5, 2024 - The Ministry of Economy and Finance has released a directive aimed at tightening the national budget for 2024, adhering to the financial management laws. The notice underscores significant cuts in discretionary spending across various ministries and public agencies to ensure funds are preserved for essential expenditures.

According to the directive, ministries and public institutions are instructed to eliminate spending on non-essential activities and operations. Furthermore, the Ministry has imposed restrictions on advancing funds without existing credit approvals, with exceptions only being granted by the Minister of Economy and Finance or the head of the Royal Government.

The circular also details a suspension of investment loans for physical infrastructure projects previously sanctioned by the government for four ministries—Rural Development, Public Works and Transport, Water Resources and Meteorology, and Agriculture, Forestry and Fisheries—with a collective halt on loans amounting to 87 billion riels.

Additionally, the suspension targets loans designated for expenditure, totaling 896.69 billion riels. This includes discontinuing financial support for various initiatives such as labor cash programs, vocational training funds, digital infrastructure enhancements, environmental projects, and the construction of a bridge over the Mekong River as part of the Phnom Penh-Bavet Expressway project. Funding for necessary operations at the Siem Reap Water Supply Authority is also affected.

In a bid to further economize, the Ministry has announced a 15% cut in total expenditure loans related to meetings, seminars, and conferences, promoting the use of digital platforms like Zoom to reduce travel and event costs.

This decision follows a report indicating a shortfall in national revenue for the first quarter of 2024, with projections showing that year-end revenues will likely fall below the targets set in the Financial Law of 2024.

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