November 13, 2023
PHNOM PENH – Cambodia’s budgetary central government (BCG) revenue surpassed 19 trillion riel (over $4.6 billion) in the first nine months of 2023, reaching nearly 73% of the financial target for the year.
This marks a decline of around 3% compared to the same period in the previous year, as reported by the Ministry of Economy and Finance.
From January to September, the government amassed 19.107 trillion riel (about $4.64 billion), representing 72.8% of the yearly budget law (BL).
Tax revenue contributed 16.251 trillion riel ($3.95 billion), accounting for 85.06%, while grants and other income stood at 1.009 trillion riel ($245.17 million) and 1.846 trillion riel ($448.57 million), making up 5.28% and 9.66%, respectively.
This reflects an approximately 3% dip in overall revenue performance from the previous year, with taxes and grants down by 3.72% and 21.01%, respectively, while other income saw an upsurge of 19.83%.
Government expenditures reached 20.823 trillion riel ($5.06 billion) in the first nine months of 2023, constituting 63.31% of the year’s BL.
Operational expenses accounted for 15.142 trillion riel ($3.68 billion), or 72.72% of the BL, while the net acquisition of non-financial assets stood at 5.246 trillion riel ($1.27 billion), representing 14.03%.
This marked a 14.03% rise in overall expenditure from the previous year, with a 15.57% increase in expenses and a sharp 55.40% increase in the net acquisition of non-financial assets.
The ministry noted that despite sluggish revenue growth and rapid expenditure in the first nine months of 2023, which resulted in a deficit of 241 billion riel ($58.61 million), the shortfall remains moderate. It equates to 25.84% of the forecasted annual budget deficit.
The deficit for this interval can be attributed to an increase in debt of 3.290 trillion riel ($800.33 million) and a rise in the net acquisition of non-financial assets by 1.574 trillion riel ($382.93 million), according to the ministry.
Hong Vanak, an economist at the Royal Academy of Cambodia, said government revenue is essential for funding activities that promote economic growth and development.
He attributed the recent downturn in collections to global political and economic crises, which have adversely affected certain export sectors.
He noted that the slight decline would not substantially impact the government’s developmental spending plans for the country.
“Recently, I have seen some reports indicating that the situation of exports to international markets and tourism has improved slightly, which could suggest an enhancement in the government’s income administration,” he said.
External pressures and a deceleration in the real estate market have led the International Monetary Fund (IMF) to revise Cambodia’s economic growth forecast for 2023 down to 5.3% from the previous estimate of 5.8% made in April.
Davide Furceri, IMF’s mission chief to Cambodia, stated during a press conference on October 31 that the country’s economy is on a gradual recovery path from the impact of Covid-19, albeit confronting domestic and international challenges.
The economy saw a rise to 5.2% growth in 2022, up from 3% in 2021, propelled by robust manufacturing and a resurgence in the services sector. The growth projection for the Kingdom stands at 5.3% for 2023 and is expected to reach 6.0% by 2024, as per the IMF.