The National Assembly yesterday unanimously approved the national budget for 2019, which will be 11.4 percent higher than this year’s, amounting to $6.7 billion.
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According to the draft of the Financial Management Law for 2019 passed yesterday, the government aims to collect $4.8 billion in revenue, with $4.2 billion coming from taxes. It plans to borrow about $1.4 billion from development partners and international institutions.
Government expenditure will amount to $4 billion, a 12.3 percent increase, while over $2.2 billion will be used to invest in the public sector, 9.8 percent more than last year.
$1.5 billion have been allocated to social welfare and $1.06 billion to security and defense, while $653 million will go to the emergency fund, $561 million to general administration and $376 towards programmes to foster economic development.
The Ministry of Education will receive the largest share, with $737 million, followed by the ministries of Defense ($604 million), Interior ($424 million), and Health ($386 million).
By contrast, the Ministry of Agriculture, Forestry and Fisheries will benefit from just $66 million, despite the fact that agriculture is one of the country’s main economic engines.
“The portion of the budget allocated to certain ministries associated with sectors of economic activity may seem small, but these ministries – including the ministries of Water Resources and Meteorology; Rural Development; Public Works and Transports; and Agriculture – absorb funds from the public investment budget, which includes the construction of up to 70 percent of infrastructure like roads, bridges, and water irrigation systems,” the law said.
Minister of Economy and Finance Aun Pornmoniroth said the budget was designed with the goal of maintaining the current growth rate of 7 percent in the medium term.
“The Cambodian government considers that the 2019 budget has to be strategic and aim to maintain what has already been achieved while supporting the creation of new projects to aid the sustainable and efficient development of the country,” Mr Pornmoniroth said.
He said the money was allocated according to what ministries and institutions were most efficient in implementing projects.
Mey Kalyan, senior advisor to the Supreme Economic Council, said, “The country’s economy continues to improve and we need more money every year to implement important projects, including building human capital and increasing social security,” Mr Kalyan said.
He added that the budget accurately targets the right projects, institutions and ministries in line with the country’s needs.
The budget is based on the government’s forecast that the national economy will grow by 7.1 percent in 2019, with gross domestic product (GDP) projected to hit $27.22 billion, and GDP per capita expected to increase to $1,706 from the current $1,563.
The industrial sector is projected to grow by 10 percent, services by 7 percent, and agriculture by 1.8 percent, according to the forecast, while the average annual inflation rate will be 3.1 percent.
The Financial Management Law for 2019 was approved by the Council of the Ministers on Oct 26 and was discussed in a workshop held at the National Assembly on Nov 6.
As planned, the law will now be submitted to the Senate for approval before being sent to King Norodom Sihamoni.