A. External Sector Developments

Developments during 1999-2002

115. During the 1999-2002 period, the authorities’ reform efforts were supported by a PRGF arrangement. The government committed to continue an outward-oriented growth strategy, recognizing that such a strategy would best allow Cambodia to realize its development potential, a policy which the government had already committed to in the earlier Policy Framework Paper, 1995-97.

116. Cambodia joined the Association of Southeast Asian Nations (ASEAN) in April 1999, to accelerate its integration into the regional and world economy. Under the attendant ASEAN Free Trade Agreement (AFTA), Cambodia has committed to reducing tariff rates on imported goods from other ASEAN members to 0-5 percent by 2010. The government has also made strides toward membership in the World Trade Organization (WTO) since the establishment of the WTO Accession Working Party on Cambodia in December 1994. Key steps in the WTO accession process were: (i) the submission of a Memorandum on Cambodia’s Foreign Trade Regime in June 1999; (ii) the release in January 2001 of the replies to WTO members’ questions on the Memorandum and ; (iii) the holding of Working Party meetings in May 2001, February 2002, and November 14, 2002, which advanced decisively the accession process. As a result, the WTO Secretariat is scheduled to prepare the Working Party’s report for the Spring 2003 meeting, which is expected to pave the way for Cambodia’s membership by September 2003.

117. Significant steps have also been taken to further liberalize the trade and exchange rate regimes. To that end, the government took the following steps to reform the tariff regime. In July 2001: (i) the maximum tariff rate was reduced to 35 percent; (ii) the number of tariff rates was reduced to four; and (iii) the unweighted average tariff rate was lowered to about 16.5 percent. The second phase of tariff restructuring involving the reduction of the unweighted average tariff rate to below 15 percent is now expected to take place in mid-2003. In addition, the conversion of the tariff classification to the new eight-digit ASEAN harmonized tariff nomenclature (AHTN) is underway, as a requirement under AFTA, which would in turn affect the unweighted average tariff rate. The government has also confirmed the liberalized nature of their exchange and payments system through the acceptance of the obligations of the Fund’s Article VIII, Section 2, 3, and 4 in January 2002.

118. The initial growth projections of domestic exports under the PRGF-supported program in 1999 provided for a slowdown of domestic exports to about 6 percent on average during 1998-02, while the projected growth of retained imports²⁹ was expected to be about 10 percent. Accordingly, the current account deficit (excluding official transfers) was expected to widen from 9 to 12-13 percent of GDP during 1999-2002. Export growth was expected to slow down as a result of garment quota restrictions imposed by the United States in early 1999, while exports of log and sawn timber was also expected to decline, reflecting the government’s strong commitment to forestry reform.

119. Balance of payments outcomes during 1999-2002, however, were more favorable than envisaged under the program. This performance largely stemmed from a higher-than-anticipated growth of exports and larger tourism receipts. Exports increased by 20 percent per annum on average. In particular, the share of garment exports to total domestic exports increased from 70 percent to 87 percent during 1999-2002. Tourism receipts have accelerated markedly, with the 2002 outcome expected to be three times larger than initial program projections. Although imports rose more rapidly than programmed, the current account deficit (excluding official transfers) was about 9 percent of GDP on average during 1999-02, much less than envisaged under the program.

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Cambodia: Exports and Imports-the Projections under the PRGF (1999-02) and the Actual Outcomes

Citation: IMF Staff Country Reports 2003, 059; 10.5089/9781451821734.002.A005

Sources: The Cambodian authorities; and staff estimates

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120. The role of trade in the economy expanded significantly during 1999-2002. Exports of goods and services increased to 55 percent of GDP in 2002 from 40 percent in 1999, and retained imports rose to 64 percent of GDP in 2002 from 48 percent in 1999. The garment and tourism industries contributed about 3 percent and 14 percent, respectively, to the average GDP growth of about 6 percent during 1999-02. The importance of these two industries in pulling the economic recovery has increased markedly compared to the 1994-98 period, when average GDP growth was 5 percent, while the contribution from the garment and tourism industry was 1 percent and about percent, respectively.

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Cambodia: The Role of Trade in the Economy

Citation: IMF Staff Country Reports 2003, 059; 10.5089/9781451821734.002.A005

Sources: The Cambodian authorities; and staff estimates

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121. Significant changes in the direction of trade for both exports and imports have taken place since 1998. The share of exports to the U.S. has increased significantly, from 31 percent of total exports in 1998 to 64 percent in 2001. This expansion reflects soaring garment exports to the U.S. In contrast, exports to ASEAN countries decreased from 42 percent of total exports in 1998 to 6 percent in 2001. However, imports from the ASEAN region have increased dramatically from 26 percent in 1998 to 72 percent in 2001. This development may reflect the predominance of foreign direct investments from other ASEAN countries.

Cambodia: Directions of Trade, 1998 and 2001

(in percent of total)

Source: Direction of Trade. IMF.

Cambodia: Directions of Trade, 1998 and 2001

(in percent of total)

				1998	2001					1998	2001
Total Exports				100	100	Total Imports				100	100
	Industrial countries			47	91		Industrial countries			29	5
		o/w United States		31	64			o/w United States		3	1
			United Kingdom	3	10				Japan	6	1
	ASEAN			42	6		ASEAN			26	72
		o/w Singapore		14	2		o/w Singapore			0	27
			Thailand	8	1				Thailand	15	35
			Vietnam	19	2				Vietnam	8	8
	Other			11	3		Other			45	24
		o/w China		5	1			o/w China		8	6
			Hong Kong SAR	3	0				Hong Kong SAR	12	8

Source: Direction of Trade. IMF.

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Cambodia: Directions of Trade, 1998 and 2001

(in percent of total)

				1998	2001					1998	2001
Total Exports				100	100	Total Imports				100	100
	Industrial countries			47	91		Industrial countries			29	5
		o/w United States		31	64			o/w United States		3	1
			United Kingdom	3	10				Japan	6	1
	ASEAN			42	6		ASEAN			26	72
		o/w Singapore		14	2		o/w Singapore			0	27
			Thailand	8	1				Thailand	15	35
			Vietnam	19	2				Vietnam	8	8
	Other			11	3		Other			45	24
		o/w China		5	1			o/w China		8	6
			Hong Kong SAR	3	0				Hong Kong SAR	12	8

Source: Direction of Trade. IMF.

122. Despite lower current account deficits during 1999-2002, the increase in gross official reserves was broadly in line with program projections, partly reflecting lower than anticipated inflows in foreign direct investment since 2001. Given the limited capacity of the government to service its debt obligations, the government has prohibited the contracting or guaranteeing of any nonconcessional borrowing. Concessional borrowing was closely monitored and disbursements of medium- and long-term loans were broadly in line with the expectations. The bulk of disbursements during 1998-2001 was provided on a concessional basis by multilateral financial institutions (IMF, World Bank, and Asian Development Bank). While finalization of outstanding debt rescheduling agreements with the Russian Federation and the U.S. has still not been completed, progress has been made toward resolving outstanding issues.

B. Industries that led the External Sector

123. Cambodia’s external sector is led by the garment industry, followed by the tourism industry. Garment exports have increased by 35 percent on average from 1998 to 2002, while total domestic exports rose by 17 percent. As a result, the share of garment exports in total domestic exports reached about 85 percent in 2002. Tourism receipts increased more rapidly than garment exports during the same period, but are still only about ¼ of the value of garment exports. Accordingly, at least over the short term, the sustainability of Cambodia’s growth and balance of payment viability depends critically on these two industries.

124. Although garment exports started in 1994, mainly to the EU market, exports to the U.S. have increased substantially since 1997, exceeding exports to the EU in 1998.³⁰ This expansion directly stemmed from the change of the U.S. trade policy toward Cambodia, with the granting of the Normal Trade Relations (NTR) status to Cambodia in 1996. As a result, foreign investors were attracted to Cambodia to benefit from a reduced tariff, and without quota restrictions. The improved US trade policy toward Cambodia also facilitated foreign direct investment inflows to Cambodia, especially in the garment sector in 1997 and 1998, leading to a 70 percent average increase in garment exports during 1997-1999.

125. Faced with the rapid increase in Cambodia’s garment exports, the U.S. imposed quota restrictions on 12 categories of garment products under the US-Cambodia Textile Agreement of 1999-2001. These increased restrictions, however, have led to an increase in non quota exports of Cambodia’s garment products to the U.S. The quota agreement provided for an automatic 6 percent increase, plus an additional increase of up to 14 percent linked to a review of labor conditions in Cambodia; additional quota increases of 9 percent were granted in both 2001 and 2002, While the growth of garment exports subject to quota stabilized at about 15 percent per annum during 1999-2001, non-quota exports expanded at an average annual rate of 100 percent, during the same period. The U.S.-Cambodia Textile Agreement has been extended for the period 2002 to 2004 under a 6 percent automatic increase and an additional increase up to 18 percent.

126. The growth of non-quota garment exports, however, declined substantially in 2002. Cambodia’s non-quota garment exports to the U.S. remained at the 2001 level during the first three quarters of 2002, while quota garment exports increased by 11 percent. In volume terms, non-quota exports to the U.S. increased only by 17 percent during the first three quarters of 2002, far below the 92 percent increase in 2001. This downward trend was evident across the product range (e.g., dresses, skirts, dressing gowns, nightwears, and other apparel including overalls, coveralls, and swimwear). This lower growth reflects loss of market share for all non-quota products, except nightwear. Regarding the other products, other countries have increased their market shares at the expense of Cambodia.³¹ Vietnam has also been able to rapidly expand its production in this area-although its market shares in most of these products are still relatively small—owing to the 2000 Bilateral Trade Agreement between the U.S. and Vietnam, which paved the way for Vietnamese garment producers to export to the U.S. market at NTR tariff rates and without quota restrictions.

Cambodia: Garment Export to the United States

(Percent change; unless otherwise indicated)

Sources: The Office of Textiles and Apparel, U.S. Department of Commerce; and staff estimates.

^1/Cambodia’s shares in U.S. imports for each product.

Cambodia: Garment Export to the United States

(Percent change; unless otherwise indicated)

			2000	2001	Market Share 1/	2002 Q1-Q3	Market Share 1/
Export growth, in value			28.4	26.8		6.2
	Quota products		19.8	7.7		10.7
	Non-quota products		175.9	71.4		−0.2
Export growth, in volume
	Quota products			46.6		21.3
	Non-quota products			91.6		16.9
		336/636 Dresses		51.4	4.5	−41.2	2.8
		342/642 Skirts		49.0	6.8	−6.4	5.7
		350/650 Dressing Gowns		260.4	5.0	6.6	4.2
		351/651 Clotton and MMF Night		142.3	12.6	56.4	18.1
		359/659 Other apparels, (including overalls, coveralls, and swimwear)		26.4	4.1	−19.3	2.8

Sources: The Office of Textiles and Apparel, U.S. Department of Commerce; and staff estimates.

^1/Cambodia’s shares in U.S. imports for each product.

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Cambodia: Garment Export to the United States

(Percent change; unless otherwise indicated)

			2000	2001	Market Share 1/	2002 Q1-Q3	Market Share 1/
Export growth, in value			28.4	26.8		6.2
	Quota products		19.8	7.7		10.7
	Non-quota products		175.9	71.4		−0.2
Export growth, in volume
	Quota products			46.6		21.3
	Non-quota products			91.6		16.9
		336/636 Dresses		51.4	4.5	−41.2	2.8
		342/642 Skirts		49.0	6.8	−6.4	5.7
		350/650 Dressing Gowns		260.4	5.0	6.6	4.2
		351/651 Clotton and MMF Night		142.3	12.6	56.4	18.1
		359/659 Other apparels, (including overalls, coveralls, and swimwear)		26.4	4.1	−19.3	2.8

Sources: The Office of Textiles and Apparel, U.S. Department of Commerce; and staff estimates.

^1/Cambodia’s shares in U.S. imports for each product.

C. Challenges for the External Sector

127. Improving competitiveness is an immediate challenge for Cambodia’s garment industry. Under the WTO Agreement on Clothing and Textiles, quota restrictions for textiles and apparels among WTO members will be phased out in 2005. Future market shares will be contingent on the competitiveness of individual exporting countries. For example, China, as a member of the WTO, has considerable potential to expand its garment exports to the U.S. after 2005, thus potentially affecting Cambodia’s market share. Garment industry representatives indicated that Cambodia’s costs would need to be reduced by about 15-20 percent to meet this challenge. Some investors have already relocated their garment factories outside Cambodia, possibly out of the competitiveness concern, as evidenced by the decline in the number of garment factories from a peak of 190 in 2000 to 186 in October 2002.

128. Further efforts are therefore required to strengthen the cost competitiveness of Cambodia’s garment industry. The role of the exchange rate policy is limited, however, due to the highly dollarized economy, Cambodia’s garment wages (minimum of US$45 a month and average of US$61 a month) are higher than those in many of its neighboring countries, Moreover, average wages in the non-garment formal sector are reported to be higher, around $80 a month. In addition, Cambodia has generous labor benefits, such as 100 percent supplementary pay for overtime, long annual leave, and about 26 official paid holidays per year. Cambodia’s electricity tariff is regarded as relatively high, although an international comparison is difficult. Cambodia’s electricity tariff for commercial and industrial consumers ranges from Riel 480/kWh (US$0.12) to Riel 650/kWh (USS0.16), while electricity tariffs for other ASEAN countries, such as Thailand, Malaysia, the Lao P.D.R., and Vietnam, range from US$0.04/kWh to US$0.08/kWh.

129. The lack of adequate infrastructure is also emphasized by the business community as a major obstacle toward investment. As for telecommunications, Cambodia has only 2 telephone mainlines per 1000 people, as against 112 in China, 8 in the Lao P.D.R., 92 in Thailand, and 32 in Vietnam. Paved roads account for only 16 percent of the total road network in Cambodia, compared with 22 percent for China (with a huge land mass), 98 percent for Thailand, and 25 percent for Vietnam.

130. A discretionary and unpredictable investment regime is regarded as another obstacle toward investment. The discretionary nature of the existing regime has given rise to hidden bureaucratic costs, and facilitation fees, which, together with the low quality of public services, are significant investment disincentives.

131. Cambodia’s garment and tourism industries rely extensively on imports. Imported materials account for about 55-65 percent of the garment industry’s exports. In the tourism sector, up to 75 percent of each tourist dollar is estimated to be returned to Thailand and Vietnam to import fresh vegetables, fruit, flowers, handicrafts, paper products, and furniture. The authorities recognize that to reduce this high dependence on imports further efforts are needed to develop supporting industries, which would in turn create new employment opportunities, generate additional income to the economy, and help reducing poverty.

132. Reversing the declining trend in non-garment exports through export diversification will be a challenge over the long term. Even excluding exports of logs and timber (which have declined sharply since 1999, due to the forestry reform program), domestic non-garment exports increased only marginally (by 3 percent), highlighting a serious competitiveness problem and/or difficulties in accessing global markets.

D. The Role of Foreign Financing

133. Foreign direct investment has declined to US$95 million in 2001 from about US$150 million annually during 1997-99. However, reversing this decline and attracting continued inflows of foreign direct investment in the garment and tourism industry are critical to Cambodia’s development. These industries arc likely to remain the engine of economic growth for the foreseeable future. Achieving a broader growth base would also require foreign direct investment into other industries, including supporting industries for garment and tourism.

134. Reducing tariff rates under AFTA will encourage foreign direct investment from other ASEAN countries. Cambodia’s continuing Generalized System of Preference (GSP) status could be an incentive for foreign investors to come to Cambodia. There are indications that new industries are emerging, (e.g., shoes, fabric). In this vein, further effort to foster an attractive investment environment, such as passing the Investment Law, moving more forcefully to reduce facilitation fees, improving infrastructure, facilitating trade through improved customs administration, and improving markets access by joining the WTO, will be very important in the period ahead.

135. External financing has been limited to grants, foreign direct investment, and loans from multilateral financial institutions. Bilateral creditors, however, have also started providing concessional loans to Cambodia. As the economic integration within the region and the world is intensified, bilateral creditors are likely to increase lending to Cambodia. However, it will be crucial for Cambodia to maintain a sustainable debt dynamic over the medium and long term. An early resolution of debt restructuring both with the Russian Federation and the United States will be critical in this regard.

E. Conclusion

136. Overall, Cambodia’s external sector developments since the mid 1990s have been broadly favorable. The country’s outward-oriented growth strategy has started to bear fruit. The volume of external trade has substantially increased over the past decade, and to a certain extent, Cambodia’s integration into the regional and world economy has been intensified. The government succeeded in joining the ASEAN in 1994, and aims to join the WTO in 2003. Progress in liberalizing the trade regime has also been made.

137. External sector developments, however, have been narrowly based on the garment and tourism industries. The garment industry is expected to encounter a major change in external competition in 2005, as a result of the phasing out of the quota policy under the WTO Agreement on Clothing and Textiles. Therefore, further improvements in cost competitiveness are needed to ensure that Cambodia’s garment industry can withstand this change. Also, efforts to diversify export industries and to develop supporting industries for garment and tourism will be crucial for fostering external sector sustainability. These efforts in turn will also contribute toward creating job opportunities and reducing poverty.

138. Foreign financing, including foreign direct investments and foreign loans, will be essential in accomplishing the above objectives. Foreign direct investment would be attracted more widely and rapidly to Cambodia if cost competitiveness was strengthened and the infrastructure and investment regimes were improved. An early resolution of outstanding external debt issues with the U.S. and the Russian Federation would also help to pave the way for additional foreign lending.

Cambodia: Basic Data, 1996–2001

Sources: Data provided by the Cambodian authorities; and Fund staff estimates.

^1/As a percent of beginning broad money stock. Represents contributions to 12-month change of broad money.

^2/Excluding re-exports.

^3/Including gold holdings.

^4/Starting in 1997, includes $1,346 million owed to countries of the former Council of Mutual Economic Assistance. This amount is indicative and subject to negotiations and rescheduling.

Cambodia: Basic Data, 1996–2001

			1996	1997	1998	1999	2000	2001	2002 Est.
Population
	Total population (mid-year)		11.0	11.6	12.2	12.5	12.8	13.1	13.4
	Population growth rate (annual percentage change)		5.4	5.5	4.7	2.6	2.6	2.5	2.0
Income
Gross domestic product (GDP; at current prices)
	(in billions of riels)		8,886	9,778	11,364	12,587	12,932	13,357	14,377
	(in millions of U.S. dollars)		3,386	3,319	3,011	3,300	3,351	3,404	3,663
	(in U.S. dollars; per capita)		307	285	247	264	261	259	273
			(Annual percentage change)
Real GDP, of which:			4.6	4.3	2.1	6.9	7.7	6.3	4.5
	Agriculture, fisheries, and forestry		2.3	5.5	3.0	0.0	−0.3	3.9	−1.7
	Industry		9.9	21.3	7.3	13.2	34.6	15.5	9.3
	Services		3.6	−2.6	0.7	7.1	5.8	2.7	3.4
			(In percent of GDP)
Saving-investment balance
	Gross national saving		7.9	13.2	9.1	13.6	9.2	12.7	13.7
		Government	−1.2	0.6	0.3	1.6	1.5	1.2	0.9
		Nongovernment	9.1	12.5	9.4	12.0	7.7	11.5	12.6
	Gross investment		13.6	14.3	ll.3	15.9	13.5	17.9	16.6
		Government	6.6	4.5	5.3	5.7	6.7	7.2	7.7
		Nongovernment	7.0	9.8	6.1	10.2	6.8	10.7	8.9
			(Annual percentage change)
Inflation
	Period average		7.1	8.0	14.8	4.0	−0.8	0.2	3.2
	End of period		10.0	9.2	13.3	−0.5	−0.8	0.7	3.7
	GDP deflator		4.7	5.5	13.8	3.7	−4.6	−2.9	3.0
			(In percent of GDP)
General Government budget
	Total revenue, of which:		8.4	9.0	8.3	10.6	11.2	11.7	12.1
		Tax revenue	6.0	6.1	6.0	7.7	8.2	8.4	8.5
		Nontax revenue	2.0	2.8	2.0	2.8	2.8	3.2	3.5
	Total expenditure, of which:		16.2	12.9	13.8	14.7	16.4	17.7	18.9
		Current expenditure	9.1	8.3	8.3	8.9	9.5	10.4	11.1
		Capital expenditure	7.1	4.6	5.5	5.8	6.9	7.3	7.8
	Overall fiscal balance, (including grants)		−1.8	−0.4	−2.5	−1.3	−2.3	−3.1	−3.3
			(Annual percentage change)
Money and credit
	Broad money, of which:		40.5	16.6	15.7	17.3	26.9	20.4	26.8
		Riel in circulation 1/	7.6	6.1	14.4	−3.5	0.3	4.5	7.5
		Foreign currency deposits 1/	32.2	9.9	0.1	17.3	25.4	16.0	17.3
	Credit to the economy 1/		18.6	14.2	13.4	3.0	2.0	−2.0	0.4
		Of which; credit to government (net) 1/	−3.1	−8.1	11.7	−6.1	−6.9	−4.3	−0.9
			(In percent; end of period)
Interest rates
	Riel savings deposits		8.8	7.4	7.5	7.3	5.9	2.6	2.3
	Foreign currency loans		18.6	18.4	17.6	17.3	17.4	15.0	17.1
			(In percent of GDP)
Balance of payments
	Current account balance (excluding official transfers)		−14.5	−7.4	−8.7	−8.9	−12.3	−13.4	−10.7
	Current account balance (including official transfers)		−5.7	−1.1	−2.2	−2.3	−4.3	−5.3	−2.9
		Exports of goods 2/	8.7	16.1	22.7	27.9	36.0	38.1	39.1
		Imports of goods 2/	22.8	24.0	31.7	36.9	49.7	52.2	51.3
			(In millions of U.S. dollars; unless otherwise indicated)
foreign exchange reserves
	Gross official reserves 3/		234	262	390	422	485	550	642
		(in months of imports of goods and services)	2.1	2.5	3.6	3.2	2.8	2.9	3.3
	Net international reserves 3/		164	197	323	349	411	470	549
External debt
	Outstanding debt (in percent of GDP) 4/		18.2	61.8	67.9	68.7	67.6	66.2	65.6
	Debt service (in millions of U.S. dollars)		138.0	124.0	124.0	125.5	129.3	54.4	56.2
		(in percent of exports of goods and services)	28.0	23.0	14.2	11.1	8.5	3.3	3.0
			(In millions of SDRs)
Fund quota			65.0	65.0	65.0	87.5	87.5	87.5	57.5
			(In riels per US. dollar)
Exchange rate
	Period average		2,624	2,946	3,774	3,813	3,859	3,924	3,925
	End of period		2,713	3,452	3,780	3,775	3,910	3,900	3,935

Sources: Data provided by the Cambodian authorities; and Fund staff estimates.

^1/As a percent of beginning broad money stock. Represents contributions to 12-month change of broad money.

^2/Excluding re-exports.

^3/Including gold holdings.

^4/Starting in 1997, includes $1,346 million owed to countries of the former Council of Mutual Economic Assistance. This amount is indicative and subject to negotiations and rescheduling.

View Table

Cambodia: Basic Data, 1996–2001

			1996	1997	1998	1999	2000	2001	2002 Est.
Population
	Total population (mid-year)		11.0	11.6	12.2	12.5	12.8	13.1	13.4
	Population growth rate (annual percentage change)		5.4	5.5	4.7	2.6	2.6	2.5	2.0
Income
Gross domestic product (GDP; at current prices)
	(in billions of riels)		8,886	9,778	11,364	12,587	12,932	13,357	14,377
	(in millions of U.S. dollars)		3,386	3,319	3,011	3,300	3,351	3,404	3,663
	(in U.S. dollars; per capita)		307	285	247	264	261	259	273
			(Annual percentage change)
Real GDP, of which:			4.6	4.3	2.1	6.9	7.7	6.3	4.5
	Agriculture, fisheries, and forestry		2.3	5.5	3.0	0.0	−0.3	3.9	−1.7
	Industry		9.9	21.3	7.3	13.2	34.6	15.5	9.3
	Services		3.6	−2.6	0.7	7.1	5.8	2.7	3.4
			(In percent of GDP)
Saving-investment balance
	Gross national saving		7.9	13.2	9.1	13.6	9.2	12.7	13.7
		Government	−1.2	0.6	0.3	1.6	1.5	1.2	0.9
		Nongovernment	9.1	12.5	9.4	12.0	7.7	11.5	12.6
	Gross investment		13.6	14.3	ll.3	15.9	13.5	17.9	16.6
		Government	6.6	4.5	5.3	5.7	6.7	7.2	7.7
		Nongovernment	7.0	9.8	6.1	10.2	6.8	10.7	8.9
			(Annual percentage change)
Inflation
	Period average		7.1	8.0	14.8	4.0	−0.8	0.2	3.2
	End of period		10.0	9.2	13.3	−0.5	−0.8	0.7	3.7
	GDP deflator		4.7	5.5	13.8	3.7	−4.6	−2.9	3.0
			(In percent of GDP)
General Government budget
	Total revenue, of which:		8.4	9.0	8.3	10.6	11.2	11.7	12.1
		Tax revenue	6.0	6.1	6.0	7.7	8.2	8.4	8.5
		Nontax revenue	2.0	2.8	2.0	2.8	2.8	3.2	3.5
	Total expenditure, of which:		16.2	12.9	13.8	14.7	16.4	17.7	18.9
		Current expenditure	9.1	8.3	8.3	8.9	9.5	10.4	11.1
		Capital expenditure	7.1	4.6	5.5	5.8	6.9	7.3	7.8
	Overall fiscal balance, (including grants)		−1.8	−0.4	−2.5	−1.3	−2.3	−3.1	−3.3
			(Annual percentage change)
Money and credit
	Broad money, of which:		40.5	16.6	15.7	17.3	26.9	20.4	26.8
		Riel in circulation 1/	7.6	6.1	14.4	−3.5	0.3	4.5	7.5
		Foreign currency deposits 1/	32.2	9.9	0.1	17.3	25.4	16.0	17.3
	Credit to the economy 1/		18.6	14.2	13.4	3.0	2.0	−2.0	0.4
		Of which; credit to government (net) 1/	−3.1	−8.1	11.7	−6.1	−6.9	−4.3	−0.9
			(In percent; end of period)
Interest rates
	Riel savings deposits		8.8	7.4	7.5	7.3	5.9	2.6	2.3
	Foreign currency loans		18.6	18.4	17.6	17.3	17.4	15.0	17.1
			(In percent of GDP)
Balance of payments
	Current account balance (excluding official transfers)		−14.5	−7.4	−8.7	−8.9	−12.3	−13.4	−10.7
	Current account balance (including official transfers)		−5.7	−1.1	−2.2	−2.3	−4.3	−5.3	−2.9
		Exports of goods 2/	8.7	16.1	22.7	27.9	36.0	38.1	39.1
		Imports of goods 2/	22.8	24.0	31.7	36.9	49.7	52.2	51.3
			(In millions of U.S. dollars; unless otherwise indicated)
foreign exchange reserves
	Gross official reserves 3/		234	262	390	422	485	550	642
		(in months of imports of goods and services)	2.1	2.5	3.6	3.2	2.8	2.9	3.3
	Net international reserves 3/		164	197	323	349	411	470	549
External debt
	Outstanding debt (in percent of GDP) 4/		18.2	61.8	67.9	68.7	67.6	66.2	65.6
	Debt service (in millions of U.S. dollars)		138.0	124.0	124.0	125.5	129.3	54.4	56.2
		(in percent of exports of goods and services)	28.0	23.0	14.2	11.1	8.5	3.3	3.0
			(In millions of SDRs)
Fund quota			65.0	65.0	65.0	87.5	87.5	87.5	57.5
			(In riels per US. dollar)
Exchange rate
	Period average		2,624	2,946	3,774	3,813	3,859	3,924	3,925
	End of period		2,713	3,452	3,780	3,775	3,910	3,900	3,935

Sources: Data provided by the Cambodian authorities; and Fund staff estimates.

^1/As a percent of beginning broad money stock. Represents contributions to 12-month change of broad money.

^2/Excluding re-exports.

^3/Including gold holdings.

^4/Starting in 1997, includes $1,346 million owed to countries of the former Council of Mutual Economic Assistance. This amount is indicative and subject to negotiations and rescheduling.