The International Monetary Fund’s latest forecast indicates that Cambodia’s economic growth is slowing. Growth is projected to fall to 4.8% in 2025 and further to 4.0% in 2026, well below the 6.0% recorded in 2024. The IMF says trade disruptions, border tensions and weak credit growth have reduced investment and consumer confidence, cooling the economy faster than expected.
The IMF believes that exports and tourism, which previously supported growth, are no longer strong enough to offset emerging pressures. An uneven tourism recovery, lower remittances and pressure on manufacturing profits are weakening domestic consumption. Slower lending also reflects greater caution among businesses and households. Trade risks, border developments and property-related debt could continue to affect economic stability.
The IMF also warns that future risks remain tilted to the downside. They include:
1. Changes in trade policy that could affect garment, footwear and other key exports;
2. Border tensions that could continue to hurt tourism and investment;
3. High property-related debt and rising non-performing loans that could put pressure on the financial system.
Failure to improve governance promptly could also amplify economic instability.
Cambodia’s Ministry of Economy and Finance takes a more optimistic view, forecasting growth of 5.2% in 2025 and 5.0% in 2026. The government believes strong exports, resilient domestic consumption and greater attention to local industries will continue to support economic progress.
Compiled by this station.
