The government signed new lending and on-lending agreements with debtors totalling nearly US$800 million in the first three quarters of 2023 to boost national economic growth. - Phnom Penh Post/ANN
PHNOM PENH (Phnom Penh Post/ANN): To boost national economic growth, the government signed new lending and on-lending agreements with debtors totalling nearly US$800 million in the first three quarters of 2023, an increase of nearly 1,700% compared to the same period of 2022, according to the Ministry of Economy and Finance.
“Debtor” refers to an entity that obtains loans; in Cambodia’s context, debtors can be the government under external borrowing, or state-owned enterprises, public institutions, state minority-owned companies and banking and financial institutions in the case of government lending, according to the ministry.
Its Public Debt Statistical Bulletin stated that from Q1-Q3 2023, the seventh mandate signed new government lending and on-lending agreements with debtors totalling $792.43 million, increasing by approximately 1,697% compared to the same period of 2022.
In Q3 2023 alone, the country signed agreements totalling $142 million and distributed $153.8 million to debtors.
From Q1-Q3 2023, $316.85 million in funds were disbursed, marking a 74% increase year-on-year.
Hong Vanak, an economist at the Institute of International Relations at the Royal Academy of Cambodia, stated on December 31 that the agreements aims to boost the national economy by providing loans to develop human resources, create jobs, increase domestic productivity, boost exports to international markets and address societal problems due to unemployment.
He noted that all loans are used effectively and accurately as they undergo a comprehensive review, from the proposal preparation to the project implementation stages.
“These loans are becoming an important element in helping the government to achieve its vision of becoming a upper-middle-income country by 2030 and a high-income one by 2050,” he said.
He added that the substantial increase in the worth of agreements highlights the government’s capability in managing revenue and providing loans.
According to the ministry, the country signed agreements with debtors totalling $46.23 million in 2022, a decrease of approximately 87% compared to the same period in 2021.
From Q1-Q3 2023, the country signed new concessional loans with development partners (DPs) totalling $1 billion, equivalent to Special Drawing Rights (SDR) 762.52 million and accounting for 45% of the ceilings permitted by law (SDR 1,700 million).
Of this, 45% was signed with bilateral DPs and 55% with multilateral DPs. Loans formalised from Q1-Q3 2023 decreased by approximately 17% compared to the same period of 2022, as per the ministry.
