Amid stable outlook, Moody’s confirms Cambodia credit rating
Moody’s Investors Service affirmed Wednesday Cambodia’s government issuer rating at B2 with a stable outlook, stating that recent labour unrest could result in only slightly slower economic growth this year. “Cambodia’s underlying credit strengths are expected to withstand the impact of recent political tensions and labor unrest in the garment industry,” a statement said. … With garment exports rising 10.7 percent last year with tourist arrivals climbing 18 percent in the year to November, Moody’s expects real GDP growth to be sustained at 7.0 percent in 2013, down slightly from 7.3 percent in 2012. … Moody’s also noted that Cambodia’s current account deficit, at 8.6 percent of GDP in 2012, was lower than the B-rated peer group median of 9.3 percent but “easily” financed by foreign direct investment (FDI), official transfers and aid. These trends persisted through 2013 and foreign reserves rose to $4.1 billion in December, up from $3.3 billion the previous year. External debt, all incurred by the government, has meanwhile declined from a peak of 78.7 percent of GDP in 1998, stabilizing at 32-34 percent of GDP over the past six years. … Moody’s noted that Cambodia’s fiscal deficit had shrunk from a peak of 8.4 percent of GDP in 2009 to 3.8 percent in 2012 and was projected to fall further to 2.8 percent this year, down from 3.0 percent in 2013. … Assessments of fiscal strength are, however, constrained by the large proportion of government debt denominated in foreign currency, estimated at 98.4 percent in 2012. …
The Cambodia Herald News Staff
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