Logo of Phnom Penh Post newspaper Phnom Penh Post - Gov’t to borrow over $1B this year: report

Gov’t to borrow over $1B this year: report

Gov’t to borrow over $1B this year: report

The government expects to borrow nearly $1 billion from external creditors this year, primarily for infrastructure development, pushing the national debt over $6 billion, according to a report issued on Friday by the Ministry of Economy and Finance.

About a third of this amount, some $341 million, had been borrowed during the first half of 2016, pooling credit from traditional bilateral and multilateral lending sources, the report noted. However, only $235 million of the new debt had been disbursed during the period.

Bilateral lenders, including traditional partners Japan, France and South Korea, provided $208 million in loans during the first half of the year. Some $26.5 million of this was borrowed from Thailand – the first line of credit from the country during the last three years on record.

Meanwhile, China, which has been Cambodia’s dominant patron during recent years, recorded zero in repayable debt issued during the period. The report did not include grants.

The World Bank was the sole multilateral lender registered as providing loans during the period. The international lender, which lifted its lending freeze for the first time in five years after it pulled out of the country in 2011, provided $132 million.

The report did not indicate from which foreign lenders it would seek the remainder of the projected lending this year. It did say, however, that the government had made $99 million in debt service payments during the first half of the year, of which more than half went to China.

In Channy, CEO of Acleda Bank, emphasised that Cambodia’s projected national debt of $6 billion was no reason for concern, and that the Kingdom still had room to scale-up the borrowing.

“Our level of foreign debt is not a concern, especially if you look at developed economies like the US and Japan, and borrowing is needed for economic development as long as it is used for the right purposes,” he said.

Channy said regardless of the source of debt, the government should strive to ensure it gets the best possible terms and that the repayment is manageable.

“Borrowing from different sources is not a bad thing, we just need to make sure we have the ability to make repayments on the loans over the long-term and that the conditions associated with the loans have fair interest rates,” he said.

MOST VIEWED

  • Prince Norodom Ranariddh passes away at 77

    Prince Norodom Ranariddh, the second son of the late King Father Norodom Sihanouk and former First Prime Minister of Cambodia, has passed away in France at the age of 77. “Samdech Krom Preah Norodom Ranariddh has passed away this morning in France just after 9am Paris-time,”

  • General’s gun smuggling ring busted

    The Military Police sent six military officers to court on November 22 to face prosecution for possession of 105 illegal rifles and arms smuggling, while investigators say they are still hunting down additional accomplices. Sao Sokha, deputy commander of the Royal Cambodian Armed Forces and commander of

  • More Cambodians studying in US

    The number of Cambodian students studying at US colleges and universities in 2020-21 increased by 14.3 per cent over the previous year despite the Covid-19 pandemic, according to a recent US government report. The 2021 Open Doors report on International Educational Exchange showed that 848 Cambodian students studied

  • Cambodia, Thailand to discuss border reopening

    Cambodian authorities from provinces along the Cambodia-Thailand border will meet with Thai counterparts to discuss reopening border checkpoints to facilitate travel, transfer of products and cross-border trade between the two countries. Banteay Meanchey provincial deputy governor Ly Sary said on November 22 that the provincial administration

  • Banteay Meanchey gunfight sees 15 Thais arrested, three officers injured

    The Banteay Meanchey Military Police have arrested 15 Thai suspects and their accomplices after a gun battle between two Thai groups caused injuries to three police officers in the early hours of November 21, local authorities said. National Military Police spokesman Eng Hy said that according to

  • Locally-trained commercial pilots to lift Cambodia’s aviation standard

    The Kingdom is boosting its civil aviation sector with the establishment of a flight school with a local airline to meet growth demands once air travel recovers At 22, First Officer Reachta Lim is the youngest commercial pilot in Cambodia. He flies with the national flag