Cambodia has signed new concessional loans with development partners totaling $787 million in the first six months of 2023, an increase of 24 percent compared to the same period last year.

According to the Cambodia Public Debt Statistical Bulletin, in Q2 2023, the Government signed new concessional loans with development partners totaling $307.62 million, equivalent to SDR 229.27 million.

SDR (special drawing rights) refers to supplementary foreign exchange reserve assets that are set and maintained by the International Monetary Fund.

It added that from January to June 2023, Cambodia has signed new concessional loans amounting to $787.5 million, equivalent to SDR 586.91 million, accounting for 35 percent of the ceiling perimeter by the lay (SDR 1,700 million).

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“51 percent is signed with bilateral development partners and 49 percent is signed with multilateral development partners,” it said. “The loans signed from January to June 2023 increased by approximately 24 percent compared to the same period last year.”

The statement added that all the loans are highly concessional, with an average grant element of around 45 percent.

“These newly signed loans aim to finance public investment projects in the priority sectors that support long-term sustainable economic growth and increase economic productivity and production,” it said.

Chan Sophal, Director of the Centre for Policy Studies (CPS), said that since the economy has weakened, access to more credit than in previous years is necessary to boost economic productivity.

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“Fortunately, Cambodia still has a low amount of foreign debt,” he said.

11 percent Increase in Disbursement

The statement said that the Royal Government Cambodia disbursed $647.02 million from the existing concessional loans in Q2 2023. Moreover, the Government has disbursed $913.78 million from the existing concessional loans, of which 34 percent is from Bilateral DPs and 66 percent is from Multilateral DPs in the first six months of 2023.

“53 percent of the disbursed amount is used for infrastructure and 47 percent for other priority sectors,” it said. “The actual disbursement from January to June 2023 increased by approximately 11 percent compared to the same period last year. “

16 percent increase in Debt Service Payments

The statement said that the Government paid debt service in the amount of $66.68 million in Q2 2023. In addition, it paid debt service in the amount of $247.36 million in the first six months of 2023.

“$247.08 million is for public external debt and $0.29 million for public domestic debt,” it said. “The debt service payments from January to June 2023 increased by approximately 16 percent compared to the same period last year.”

A report said that despite being impacted by Covid-19 and other external factors, Cambodia’s public debt situation continues to remain “sustainable” and “low risk” since all the key debt indicators in 2023 are well below the thresholds.

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