Kingdom’s public debt

In the fourth quarter of 2024, the Cambodian government signed new loan agreements with creditors amounting to $763.83 million, bringing total public debt to over $12 billion, more than 99% of it external. Additionally, the government paid nearly $560 million in debt service.

At the end of 2023, the Kingdom’s total public debt stood at $11.24 billion, 99.5% of it external.

The Cambodia Public Debt Statistical Bulletin published by the Ministry of Economy and Finance on March 10 revealed that as of Year-end 2024, including old debt, the government of Cambodia (RGC) had total public debt stock of $12.03 billion.

Of the debt, 99%, or $11.92 billion, was public external debt (comprising of 62% from Bilateral Development Partners - DPs and 38% from Multilateral DPs) and 1%, or $115 million, was public domestic debt.

The composition of the public debt stock is comprised of USD 49%, SDR 18%, JPY 10%, CNY 10%, EUR 8% and local and other currencies 5%.

In Q4 2024, the government signed concessional loans with DPs for a total of $763.83 million equivalent to SDR 582.77 million.

In the whole of the year, it signed new DP concessional loans of 1,795.84 million equivalent to SDR 1,370.16 million, accounting for 81% of the ceiling permitted by Law (SDR 1,700 million).

Of the year’s loans, 39% were signed with Bilateral DPs and 61% with Multilateral DPs. The loans signed in 2024 increased by approximately 2% over 2023.

“The loans are highly concessional with an average grant element of around 45%. Their purpose was to finance public investment projects in priority sectors that support long-term sustainable economic growth and increase economic productivity/production,” explained the bulletin.

The document confirmed that unlike the new loan agreements, In Q4 2024, the government serviced $91.99 million of debt. In the whole of 2024, this figure was $558.77 million.

The annual breakdown was as follows: 1) $542.79 million for public external debt, of which $419.14 million was for principal and $123.65 million was for interest and other fees, and 2) $15.98 million was for public domestic debt, $12.72 million for principal and $3.27 million for interest.

“The debt service payments in 2024 increased by approximately 8% compared to 2023,” added the bulletin.

According to the Ministry of Finance, the preliminary results of a 2024 Estimated Debt Sustainability Analysis (DSA) showed that the Kingdom’s public debt situation continues to remain “sustainable” and at “low risk” of debt distress.

Key debt indicators all fell below acceptable thresholds, with the Present Value of Total Public Debt to GDP at 19.3% compared to the 55% threshold, and the Present Value of Public and Publicly Guaranteed External Debt to GDP at 19%, when compared to the 40% threshold.

Finance minister Aun Pornmoniroth was quoted in the bulletin.

He described the debt situation as “manageable”.

The minister attributed the sustainability of the Kingdom’s p 73i ublic debt to a strong public debt management system, which includes: 1. A sound legal framework, 2. Policies, strategies, and operational procedures for comprehensive management, 3. Institutional capacity and sufficient human resources, and 4. Information systems for operational management and data storage, which serve as the foundation for debt risk analysis and monitoring.

The Budget Law has indicated that for fiscal year 2025, the government may borrow from external sources up to 2,000,000,000 SDR (2 billion Special Drawing Rights).

Loans that are agreed within this framework must be in the form of concessional borrowing, which is to be repaid with favorable interest rates.