March 7, 2012

Dagong puts Cambodia's sovereign credit rating at B


BEIJING, March 6 -- The Dagong Global Credit Rating Company on Tuesday assigned Cambodia a local and foreign currency sovereign credit rating of "B" with a stable outlook.

The rating indicates that the country's economic, financial and fiscal condition is still weak despite continuous improvement, forcing the Cambodian government to rely on international assistance and concessional loans and weakening its debt repayment capability, the agency said.

The rating was Dagong's first for the southeast Asian country.

Dagong said the country's short-term economic growth rate will decline from 6 percent in 2011 to 4.5 percent and 5 percent in 2012 and 2013, respectively, due to the impact of the worsening global economic environment.

However, the Cambodian economy will have relatively strong momentum and grow at a high level with the help of international assistance and vigorous growth in other Asian economies, Dagong said.

It also estimated that the debt burden ratio of the government at all levels in Cambodia will be 31.4 percent and 31.9 percent in 2012 and 2013, respectively, and will stay around 32 percent in the medium-term.

Excluding reconstruction expenditures following a 2011 flood, Dagong predicted the nation's fiscal deficit will contract from 3 percent in 2011 to 2.2 percent and 2 percent in 2012 and 2013, respectively, and will continue to drop to below 2 percent in the medium-term.

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