Cambodia got a B2, stable, rating by Moody’s Investors Service for having small fiscal deficits, low government debt and a high capability to service debt, which Moody’s said were the kingdom’s credit strengths. “In Cambodia, strengthening government revenue collection and macroeconomic and exchange rate stability together with the authorities’ efforts to address institutional weaknesses and diversify the economy should continue to support sovereign credit quality,” Moody’s said in a report released yesterday.

 

“Cambodia’s institutions face greater challenges, but reforms are in train. Its ongoing reforms to reduce corruption and enhance the rule of law are positive, although they have yet to materially strengthen its institutions,” it added. “Cambodia’s smaller fiscal deficits, lower government debt and higher debt affordability –reflecting its larger concessional funding base – are credit strengths,” said Moody’s, comparing the kingdom to neighbouring Vietnam which got a B1, positive, rating.

 

Moody’s also stated that while political risk was moderate in Cambodia, the potential for domestic political tensions could reduce “the attractiveness of doing business” in the country. The investors’ service also pointed out that Cambodia’s current credit growth could pose an increasing risk to the financial sector.

 

read more http://www.khmertimeskh.com/5078381/cambodia-gets-b2-moodys-rating/

 

 

-- © Copyright Khmer Times 16/08

Has anybody else seen The Big Short? Brilliant movie and it wouldmake anyone wondder why we are still in thrall to these ratingsagencies. They should have followed Arthur Andersen into oblivion, after ENRON disaster.

B2 is decent enough to attract foreign investment. But a higher rating would be much better and provide cheaper investments. Cambodia needs to be very careful in its next elections to keep the patina of democracy or it may find a much lower rating that will discourage foreign investment.