Government approves budget bill for 2022

Government approves budget bill for 2022

The Cambodian government approved a draft budget bill of 32,576.9 trillion riels (approximately $8.013 billion) for its expenditure for 2022, with national revenue set at 23,462.6 trillion riels (approximately $5.771 billion).

The draft budget bill was approved in the weekly cabinet meeting held on Oct 22. It was presided over by Prime Minister Hun Sen.

The approved expenditure rose by 6.8 percent compared with 2021 – equal to 26.4 percent of the country’s gross domestic product (GDP) – and national revenue increased by 18.9 percent (17.7 percent of GDP), according to a statement on the outcome of the meeting.

About 58.6 percent – $4.701 billion of total expenditure – goes to current expenditure, while the rest goes to national capital expenditure (public investment expenditure).

Of the total revenue, the government plans to raise income from fiscal revenues – incomes from tax and custom, at $4.975 billion, up 15.5 percent compared with 2021, read the statement, adding that tax income is set to increase by 22.5 percent to $2.417 billion and customs tax by 9.5 percent to $4.558 billion.

For non-fiscal revenue, the government targets to earn $474 million, a year-on-year increase of 11.7 percent, adding that capital revenue is set to increase by 28.2 percent to $2.063 billion.

To meet expenditure, the government targets the ceiling of borrowing at 1,600 million Special Drawing Rights (SDRs) –approximately $2.200 billion – while another $300 million is expected to be collected from the first government bond issuance. An SDR is an international reserve asset, created by the IMF in 1969 to supplement its member countries’ official reserves.

According to the Ministry of Economy and Finance, setting the borrowing ceiling for 2022 at 1,600 million SDRs is to enable the government to sign on borrowing from China, Japan, France, Thailand, South Korea, the German Development Bank, the Asian Development Bank, the World Bank, the Europe Investment Bank and the Asian Infrastructure Investment Bank for financing programmes and public investment projects for 35 programmes.

“In 2022, the government plans to issue the first government bonds of $300 million for financing public investment projects to enhance the economic growth and productivity…,” read a statement from the Ministry of Economy and Finance issued on Oct 22.

“The first government bond issuance and above-mentioned borrowing will not increase the burden of indebtedness on Cambodia,” the ministry said.

“The situation of Cambodia’s public debt remains ‘sustainable’ and ‘lower-risk’ in which key debt indicators of Cambodia are well below the respective indicative thresholds,” stated the ministry.

As of the first semester this year, the government had a total public debt outstanding of $9.188.9 billion, the ministry said, including debt owned by China accounts of 43.78 percent, Japan at 8.91 percent, South Korea 5.04 percent, bilateral debt with other developing partners at 5.38 percent, and write-off-negotiation processing debt of 6.75 percent.

The government also places its economic growth projection of 4.8 percent for next year, increasing from the predicted 2.4 percent growth this year.

Under the country’s law, the draft budget law for 2022 needs to be adopted by the National Assembly before the year-end. Khmer Times