Total government revenues and expenditures reached 1.853 trillion and 1.088 trillion riel ($463 million and $272 million), respectively, in the first month of 2023 – equivalent to 7.16 per cent and 3.13 per cent of the full-year targets, according to the Ministry of Economy and Finance.

The government budget surplus nearly tripled year-on-year to 765 billion riel, as revenues climbed 11.20 per cent and expenditures dropped by almost 22 per cent, as indicated by ministry statistics, which observers say reflect a marked pick-up in economic activity amid a global slowdown.

Tax and non-tax revenues stood at 1.754 trillion and 100 billion riel – equivalent to 7.49 per cent and 4.65 per cent of their respective 2023 targets – up 8.67 per cent and up 88.65 per cent year-on-year.

Capital and current expenditures were to the tune of 297 billion and 791 billion riel, down 54.90 per cent and up 8.31 per cent year-on-year.

Foreign financing and total government deposits hit 141 billion and 33 billion riel – the former of which was equivalent to 2.20 per cent of the full-year target.

All aforementioned targets were set by the Law on Financial Management for 2023.

‘Careful, effective’

“Overall, the budgeted expenditure for 2022 upholds the premise of minimising unnecessary spending while shifting the priority to further combat the consequences of the Covid-19 pandemic,” the ministry said.

“The Royal Government has carefully and effectively managed and utilised the total financing, which is able to sustain the above implementations in a timely manner,” it added.

Anthony Galliano, group CEO of financial services firm Cambodian Investment Management Co Ltd, told The Post on March 22 that some observers have predicted that “the rapid pace of increasing tax revenue collection over the last decade would be challenged in 2023 – the government projecting such a scenario end of 2022”.

However, he said, tax revenue collection “surprised on the upside again, continuing a stellar performance by the General Department of Taxation [GDT] in filling the national coffers.

“It is particularly comforting that non-tax revenue is accelerating as there has been a historical substantial reliance on tax revenue in the national revenue budget.

“Capital markets should be reassured with the large budget surplus – evidence of the government’s ability to superbly manage the national budget.

“This should underpin the case for a future re-evaluation of the Kingdom’s credit rating if such performance continues, and also strengthen the case for the level of low interest rate on its sovereign debt.

“Cambodia continues to prove its case as the ‘Asian Tiger of the 21st Century’ and I remain sanguine on the economic prospects for 2023, especially as I believe growth predictions may be understated.

“We are seeing strong interest in investment in the Kingdom, especially in the SME [small- and medium-sized enterprise] sector, a key driver to economic growth,” Galliano added.

Still, with knock-on effects from the Ukraine conflict, climate change and Covid-19 keeping the global economy in an uncertain state, the government downgraded its 2023 growth forecast for the Cambodian economy to 5.6 per cent, compared to the 6.6 per cent it presented in October.

This was revealed by finance ministry permanent secretary of state Vongsey Vissoth at a January 25 public forum on macroeconomic management and the 2023 budget law.

Although fallout from Covid-19 has subsided, the Ukraine crisis and climate change will put significant downward pressure on global economic growth, with the US, EU, China and other major buyers of Cambodian goods facing particularly grim prospects, he stated.

The latest growth forecast figure – which Vissoth affirmed had been personally approved by Prime Minister Hun Sen – is considerably greater than the 2.7-per-cent growth rate estimated for the global economy, he noted.

He argued that the Kingdom’s economic growth is underpinned by the increasing diversity in its export mix, with textile-related items accounting for a considerably smaller share than before.

“To deal with these difficulties, we must minimise the negative impact, and seize opportunities for progress, because every crisis represents an opportunity,” he stressed.