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Gov’t Spends $1.4 Billion On COVID-19 This Year, Double the Expected Outflow


FILE - Phnom Penh's Old Market was closed during the government’s lockdown of the capital city and nearby Takhmao to stop the spread of Covid-19 in April 2021. (Kann Vicheika/VOA Khmer)

The government will spend $1.4 billion on the economy and measures to prevent COVID-19 this year, said a senior minister, while also lowering growth expectations to 2.4 percent.

Finance Minister Aun Pornmoniroth was speaking at a parliamentary workshop organized by the National Assembly to discuss and explain the drafting of the national budget for next year. Aun Pornmoniroth said he expected growth to drop from the projected 4 percent to 2.4 percent.

The minister said the ongoing COVID-19 community transmission was the main reason the government had to lower its annual growth forecast.

“The widespread transmission of COVID-19 in the community is severely disrupting commercial activities, causing a drastic decline in tourism, wholesale and retail domestic consumption, construction, and real estate,” the finance minister said.

Cambodia has recorded 88,242 COVID-19 cases and 1,762 deaths as of Friday, with more than sixty percent of the country’s population now vaccinated against the virus, according to the Health Ministry.

FILE - A Phnom Penh neighborhood near the Ministry of Economy and Finance in August 2021. (Aun Chhengpor/VOA Khmer)
FILE - A Phnom Penh neighborhood near the Ministry of Economy and Finance in August 2021. (Aun Chhengpor/VOA Khmer)

Finance Ministry Spokesperson Meas Soksensan said he was attending a meeting and refused to comment when reached by VOA Khmer on Friday.

A Finance Ministry document used during the Tuesday parliamentary workshop and obtained by VOA Khmer reveals that the government has earlier estimated to spend only $720 million on the pandemic and economic measures this year but the recent community transmission event had doubled that estimate.

Of the $1.4 billion, around $740 million is being used to provide healthcare services and the rest is being spent to support the country’s economic recovery. The document showed that Cambodia spent $840 million on the COVID-19 health and economic measures in 2020.

The document outlines a proposed budget of $8.5 billion for 2022, of which $910 million is earmarked for the COVID-19 response.

“[The 2022 budget] is characteristically designed to be a fierce effort to fight against COVID-19 to concurrently protect people’s lives and build a foundation to live with COVID-19 so that we can rebuild our economy and restore people’s livelihoods,” Aun Pornmoniroth told lawmakers.

FILE - Two people walk past a vehicle of Prime Minister Hun Sen in Phnom Penh’s Calmette hospital in March 2021. (Aun Chhengpor/VOA Khmer)
FILE - Two people walk past a vehicle of Prime Minister Hun Sen in Phnom Penh’s Calmette hospital in March 2021. (Aun Chhengpor/VOA Khmer)

The National Assembly’s Second Vice President, Khuon Sudary, urged the government to maintain the momentum of budget sustainability as a key to maintaining stability.

“Economic security is national security. We cannot maintain the nation’s independence and strategic autonomy unless our economy is strong and resilient,” Khuon Sudary said.

According to the Finance Ministry document, foreign debt reached $9.1 billion by mid-year and is expected to top $10 billion by the end of the year. The document said the government would have to rein in spending.

In a letter this week to Civil Service Minister Prum Sokha, Aun Pornmoniroth asked the ministry to freeze all new civil and military recruitments to reduce costs.

Ky Sereyvath, an economist at the state-run Royal Academy of Cambodia, said sustained production and exports would fill the gaps left by other regional production hubs dealing with worse COVID-19 situations.

“When we reach herd immunity through the vaccination campaign, our fundamental sectors will rebound,” he said. “First and foremost, travel could enable domestic tourists to fill the gaps left in the absence of foreign tourists.

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