1. This DSA continues to assess Cambodia at a low risk of debt distress. The indicative debt distress thresholds remain unchanged from the 2015 Article IV DSA. Under the baseline scenario, the external and the public debt burden indicators never breach the policy-dependent indicative thresholds, and the PV of external debt follows a downward trend in the medium term. Downside risks to the baseline scenario include external arrears, and the materialization of contingent liabilities. The macroeconomic assumptions underlying the baseline scenario remain similar to the 2015 DSA. Cambodia’s Country Policy and Institutional Assessment (CPIA) rating remained unchanged at “medium performer.”
The authorities have requested IMF technical assistance on PPPs using the Fiscal Risk Assessment Model (P-FRAM), which will (i) evaluate the PPP management framework; (ii) provide capacity building in assessing fiscal risks and contingent liabilities arising from PPPs; and (iii) identify mitigating measures among other priorities currently under discussion. There is also an on-going technical assistance by development partners, with the ADB supporting Cambodia in establishing a legal and institutional framework for development of PPPs and the World Bank providing technical assistance to determine the size of contingent liabilities related to PPPs.