Cambodian financial institutions disbursed USD38 million worth of unsecured loans over the last 12 months.

▪ Cambodian financial institutions disbursed USD38 million worth of unsecured loans over the last 12 months. According to the Credit Guarantee Corporation of Cambodia (“CGCC”), Cambodia’s credit institutions have released a total of USD38.1 million in unsecured loans to 377 businesses over a 12-month period as of April 2022. Those loans are guaranteed by the CGCC for businesses in industries, such as food and beverage, restaurant, retail, construction, manufacturing, and agriculture. The loan amount between USD6,000 to USD1 million was reportedly used for three (3) main purposes: (i) working capital; (ii) investment and business expansion; and (iii) capital expenditure.

▪ Tax revenue rose 29.4% in 4M2022. According to the General Department of Taxation, Cambodia collected USD1.5 billion of tax revenue in the first four months of 2022, showing an increase of 29.4% Y/Y. The 4M2022 tax revenue completed 53.3% of the government’s full- year target of USD2.8 billion. On annual basis, six (6) tax categories recorded a significant increase, including property and land rent tax (+114.6% Y/Y), specific tax (+110.6% Y/Y), salary tax (+88.6% Y/Y), value-added tax (+84.4% Y/Y), income tax (+82.0% Y/Y), and stamp duty (+77.3% Y/Y).

▪ Fishery exports reached USD39 million in 5M2022. The Fisheries Administration (“FiA”) reported that Cambodia exported 1,291 tons of fresh fishery products in the first five months of 2022, translating into a revenue of USD39 million. The export volume represented a decrease of 11.8% Y/Y and completed only 12.9% of the 10,000 tons annual target for 2022. The drop in export volume was attributed by FiA to climate change, growing population, and illegal fishing. FiA expected the exports to China would resume in late June following the suspension as COVID-19 cases resurge.

Commentary:
After three decades of internal conflicts, Cambodia has emerged as one of the fastest growing economies, with an average GDP growth of 7.0% over the past two decades. The transformative growth was much likely contributed by the political stability and continuous institutional reforms. While the unprecedented hit of the COVID-19 pandemic disrupted the development progress of the country, Cambodia has been back on track to recover from economic shocks. Following the reopening of the economy and the high vaccination rate, Cambodia is expected to grow above 5.0% in 2022 and over 6.0% in 2023. Despite the upcoming communal and national elections in 2022 and 2023, respectively, it is likely that political stability will persist. While it was announced that there would be a new generation of government officials following the elections, there is uncertainty surrounding the long-term implications of these reforms due to the lack of information.

Source: Forte Capital