Cambodia's general government gross debt (GGGD) is projected to reach 37.5 per cent of GDP (gross domestic product) in 2023 – up from 36.5 per cent in 2022 – which, although marking the highest rate since 42.7 per cent in 2004, is lower than that of all but two ASEAN countries, according to new International Monetary Fund (IMF) data.

The Washington-based multilateral lender has warned than many low-income countries are in – or at high risk of – “debt stress” as the Ukraine conflict and other crises prolong, requiring policy adjustments and precautionary measures to ensure fiscal space and to fortify financial stability.

The IMF put the Kingdom’s 2023 GGGD-to-GDP ratio higher than those of ASEAN countries Brunei (2.3% – versus 2.1% in 2022) and Vietnam (36.3% vs 37.1% in 2022), but lower than those of Indonesia (39.1% vs 39.9%), the Philippines (56.7% vs 57.5%), Thailand (61% vs 60.5%), Malaysia (67% vs 66.3%), Myanmar (61.3% vs 63.9%) and Laos (123% vs 128.5%).

Timor-Leste, meanwhile, scored 16.7 per cent, versus 7.5 per cent in 2022.

Cambodia’s GGGD-to-GDP ratios for the 2024-2028 period were given as 38.8 per cent in 2024, 39.7 per cent in 2025, 40.4 per cent in 2026, 41.2 per cent in 2027, and 41.6 per cent in 2028 – the last of which is expected to exceed the rates of Brunei (1.9%), Timor-Leste (26.8%), Vietnam (31.3%) and Indonesia (37.3%), but remain lower than those of the other ASEAN nations.

IMF managing director Kristalina Georgieva earlier this month told the Global Policy Agenda press briefing at the 2023 Spring Meetings in Washington DC that global growth is projected to decelerate to 2.8 per cent in 2023 “and remain weak at around three per cent over the next five years”.

“I want to stress that an issue that we all have to be very mindful of is that low-income countries are particularly vulnerable, given [the] high level[s] of debt. Their per capita income growth lags those better off.

That means it is harder and harder for them to catch up.

“We have also stepped up support for vulnerable middle-income countries, including through a temporary increase in the amount members can borrow from the IMF,” the Bulgarian-born economist said.

“So, if you have a small fraction of the debt covered and a big part of it not covered, that obviously is not a healthy way to deal with a growing debt problem. We take it upon us to support a more inclusive and effective debt resolution process,” she added, noting that debt problems are also posing challenges for middle-income economies.

According to a Ministry of Economy and Finance report issued at a late-January public forum on macroeconomic management and the 2023 budget law, Cambodia’s public debt stock closed 2022 at $9.97259 billion – $9.95508 billion from external sources and “nearly $20 million” from sovereign bond sales.

China represented the largest share of these external sources, at 40 per cent, followed by other bilateral sources (22%), the Asian Development Bank (21%), the World Bank (9%), “old debt” (6%), and other multilateral sources (2%), the report noted.

The ministry defines “old debt” as that “incurred before 1993”, and hence “inherited from the previous governments”.

Speaking at the forum, ministry permanent secretary of state Vongsey Vissoth shared that the Kingdom’s public debt per capita was “about $600”, compared to the US’ “nearly $100,000”, given its “over 120 per cent” public debt-to-GDP ratio – the IMF put the US’ GGGD-to-GDP ratio at 122.2 per cent in 2023, up from 121.7 per cent in 2022.

The IMF also projects Cambodia’s general government net lending/borrowing to decline to minus five per cent of GDP in 2023, from minus 4.1 per cent last year.

Similarly, the Kingdom’s general government revenue and expenditure are forecast to increase to 23 per cent and 27 per cent of GDP, from 22 per cent and 26.2 per cent in 2022, respectively, before ending up at 23 per cent and 26.4 per cent in 2024, according to the fund.