ADB Lowers Cambodia 2026 Economic Growth Forecast to 3.9% Amid Tourism Crisis

In its September 2026 update report, the Asian Development Bank (ADB) revised downward its forecast for Cambodia’s economic growth in 2026 to 3.9% (down from 4.1% in July) and raised the inflation forecast from 4.5% to 4.7%. This revision is due to weakness in the tourism and services sectors. However, economic growth is expected to rebound to 4.7% in 2027, with inflation at 2.8%.
Key economic supports in the first half of 2026
Garment exports grew 6.3% (reaching $8 billion). Non-garment exports surged 38.4% (reaching $6.7 billion), driven by high value-added products such as vehicle parts, tires, electrical components, and wood products.
Agricultural exports: increased 23.6%, notably cashew nuts, cassava, and rice.
International reserves: maintained a strong level through foreign direct investment inflows, able to support imports for approximately 7 months, even though the current account deficit is projected to widen to 11.5% of GDP.
Key challenges and risks: A sharp downturn in tourism, with international tourist arrivals falling 47.9% (to just 1.8 million in the first half of the year), due to the conflict in the Middle East and the closure of the Cambodia-Thailand land border, directly affecting transportation, hospitality, and retail.
Prolonged sectoral weakness: Construction and real estate continue to stagnate, while agriculture’s contribution remains modest.
External and natural risks: global economic uncertainty, sluggish growth among trading partners, rising commodity prices, non-performing loan issues, and the El Niño phenomenon, which threatens agricultural production.
Ms. Yasmin Siddiqi, ADB Country Director for Cambodia, noted that Cambodia’s economy continues to demonstrate resilience, with foreign investment inflows and industrial exports helping to offset the impact of the tourism downturn. At the same time, Cambodia must continue to promote economic diversification, enhance competitiveness, and increase resilience to climate change to ensure sustainable growth.▍
By: Pai Sokhim