Cambodia’s economy is expected to grow at a slower pace for the next year-and-a-half, with a projected growth rate of 5.2% in 2025 and 5.0% in 2026, due to the anticipated negative impacts on certain export sectors resulting from a global trend toward protectionism in many countries.
According to the Macroeconomic Situation and Outlook Report for 2025 and 2026, prepared by the General Department of Policy of the Ministry of Economy and Finance, the International Monetary Fund (IMF) forecast released in April 2025 estimates global economic growth to be around 2.8% in 2025 and 3.0% in 2026.
These figures are lower than the IMF’s January 2025 forecast of 3.3% for both years. This downgrade reflects expectations of negative global shocks, particularly due to rising protectionism through broad-based and reciprocal tariff hikes, which will hinder economic growth in major countries like the US, the EU, China and several ASEAN nations.
Cambodia’s economic outlook mirrors global and regional trends, with growth expected to decline from the 6.0% growth recorded in 2024.
According to the report, the industrial sector is expected to show slight deceleration, with growth rates of 7.8% in 2025 and 7.1% in 2026. This slowdown is largely due to a decline in garment sub-sector growth, driven by falling global demand and fewer orders from Cambodia’s trading partners. These changes are a consequence of the rapid rise in protectionism, which is dampening global economic momentum.
Growth in non-garment manufacturing sub-sectors is also projected to decline, especially for key exports to the US like furniture and automobile tyres. However, these sectors are still expected to maintain positive growth, supported by continued exports of other key products like electronic components, alongside stable domestic demand for products such as assembled vehicles, food and beverages.
The construction sub-sector is expected to continue growing slowly, supported by residential and industrial construction (e.g., factories and warehouses).
The services sector is also expected to underperform, with a projected growth rate of 3.8% in both 2025 and 2026. This is due to slower domestic consumption and spending (wholesale and retail), as well as transportation and logistics activities, which are being impacted by the declining income from sectors like garment manufacturing. Nonetheless, these sub-sectors are still projected to maintain positive growth.
Meanwhile, tourism-related services, including hospitality and food services, are expected to continue growing.
In the agriculture sector, growth is projected to remain stable, with 0.9% in 2025 and 1.0% in 2026, supported by strong performance in crop production. This is reflected in continued growth in key agricultural exports, such as milled rice, paddy rice, cashew nuts and cassava.
The fisheries sub-sector is also expected to perform well, especially in freshwater fisheries, while livestock farming is slowly recovering, due to improved investor confidence. At the same time, the government is continuing its efforts to regulate frozen meat imports to protect local production.
“The above real economic growth rates will result in nominal GDP reaching KHR 206.396 trillion ($51.5 billion) in 2025 and KHR 221.669 trillion ($55.3 billion) in 2026, while GDP per capita will increase to around $2,896 and $3,071, respectively,” said the ministry.
“In the medium term (2027–2028), Cambodia’s economy is expected to gradually recover, with an average growth rate of around 5.6%, due to a slow rebound in export-related sectors, combined with ongoing market adjustments in both garment and non-garment manufacturing sectors. This includes market diversification beyond the US, as well as adaptive responses to economic shocks and disruptions across sectors and businesses,” it added.
