The World Bank's latest report indicates that Cambodia's economic growth this year may slow further, with the projected growth rate revised down from 3.9% to 3.5%. Compared with 5.3% growth in 2025, the economy is clearly under pressure this year.
The World Bank noted that weaker household consumption, declining remittances, high inflation and sluggish bank credit expansion are weighing on the economy. Volatility in the property market and tighter financing conditions have also affected corporate investment to some extent, dampening domestic consumption and investment momentum.
However, Cambodia's merchandise exports continue to perform strongly, serving as an important pillar supporting the economy and partly offsetting the pressure from insufficient domestic demand.
For next year, the World Bank has likewise lowered its forecast, projecting Cambodia's economy to grow 4.0% in 2027, down from a previous forecast of 4.9%. The bank, however, expects growth to rebound to 5.0% in 2028, driven mainly by stabilizing energy prices, a recovery in tourism and improved incomes as migrant workers return.
But uncertainty clouds the outlook. The World Bank specifically cautioned that if El Niño conditions persist, agricultural output in 2027 could be affected, weighing on economic growth.
The bank said whether Cambodia's economy can regain momentum will depend not only on exports, but also on whether domestic consumption recovers, tourism rebounds and returning migrant workers can integrate more effectively into the domestic labour market. The report will also serve as an important reference for discussions at the International Monetary Fund and World Bank Group Annual Meetings to be held in Bangkok in October.
