Cambodia's national debt stood at $5.8 billion at the end of 2016, totalling nearly a third of GDP, according to the latest debt bulletin released by the Ministry and Economy and Finance earlier this month.

The report revealed that the Cambodian government signed agreements to receive $803 million in concessional loans last year, which increased the total borrowing since 1993 to more than $8.3 billion.

Approximately 60 percent of the loans granted last year were disbursed by foreign governments, while the remaining 40 percent were issued by international lending institutions.

Roughly 73 percent of the lending went to infrastructure projects while the rest went to “other priority sectors”, the report said. The newly released national debt figure puts Cambodia’s debt-to-GDP ratio at about 31.6 percent.

China was Cambodia’s largest single creditor last year at $266 million, while members of the Paris Club, that include France and Japan, gave out a combined total of $181 million.

Multilateral development agencies, including the World Bank and the Asian Development Bank, loaned a total of $315 million in 2016.

Chan Sophal, director of the Centre for Policy Studies, said that Cambodia’s current level of outstanding debt was manageable given the Kingdom’s country status.

“The level of debt currently is not a concern compared to other countries in similar stages of development,” he said. “With increasing revenue mobilisation and exports, Cambodia’s capacity to service debt has also increased significantly.”

He advocated that Cambodia needed to increase borrowing provided that the loans are used effectively and efficiently to fuel growth and development in the future.

“Cambodia still needs a lot more infrastructure in priority areas such as reservoirs and irrigation systems, roads and bridges,” he said.

While he predicted that Cambodian would likely continue to depend heavily on China, he said that the Kingdom should diversify its debt sources.