SINGAPORE, April 30, 2026 – Cambodia’s economy proved to be relatively resilient against external shocks in 2025. Economic growth moderated to an estimated 5.3 percent in 2025 and is projected to slow further to 4.3 percent in 2026 as higher global oil prices weigh on the economy.
To manage heightened uncertainties and repeated shocks, proactive policies and effective implementation will be essential, including targeted fiscal support to vulnerable households and firms affected by the energy shock and the border conflict and preemptive measures to address banking sector vulnerabilities, particularly elevated non-performing loans (NPLs).
This preliminary assessment follows AMRO’s Annual Consultation Visit to Cambodia from April 20 to 29, 2026. The mission was led by Lead Economist Jinho Choi, with participation from AMRO Director/CEO Yasuto Watanabe and Chief Economist Dong He.
Economic developments and outlook
“Despite heightened uncertainty surrounding US reciprocal tariffs, Cambodia’s economy grew steadily in 2025, supported by strong garment exports, steady FDI inflows, and swift policy responses,” said Choi. “Looking ahead, proactive and targeted policy support, together with structural reforms, will be important to sustain medium-term growth.”
Inflation averaged 2.5 percent in 2025 but is expected to rise to 3.9 percent in 2026 due to higher global oil prices.
The current account shifted to a deficit of 3.6 percent of GDP in 2025 and projected to widen further to 8.5 percent of GDP in 2026, reflecting higher energy imports, weaker tourism receipts, and a sharp decline in remittances following the return of migrant workers from Thailand. Meanwhile, FDI inflows remained resilient.
Credit growth improved to some extent but remained relatively slow in 2025, while the NPL ratio remained elevated at above 8 percent. The real estate sector also continued to face persistent oversupply and subdued demand.
The fiscal deficit narrowed to 1.0 percent of GDP in 2025 due to stronger revenue collection and contained spending. However, the deficit is projected to widen in 2026 because of higher spending related to border security and elevated oil prices. Public debt remained low and stable at below 30 percent of GDP.
Risks, vulnerabilities, and challenges
High oil prices remain the most immediate external risk. Slower growth in major trading partners, driven by spillovers from the Middle East conflict or renewed trade protectionism, could further weaken exports and investment.
Banking sector vulnerabilities have increased amid rising NPLs and recent bank liquidations.
Uncertainty surrounding the border conflict also poses downside risks to economic activities.
Cambodia’s graduation from least developed country status by end-2029 could reduce export competitiveness and raise borrowing costs if not managed carefully.
Policy recommendations
Policy priorities should focus on strengthening resilience while supporting growth.
Fiscal policy should remain flexible and targeted, including temporary support measures to cushion the impact of higher energy prices and border disruptions. Over the medium term, rebuilding fiscal buffers should remain a priority.
Monetary and financial policies should continue to support economic activity while remaining vigilant to inflation and financial stability risks. The National Bank of Cambodia (NBC) should maintain an accommodative policy stance, strengthen credit intermediation through targeted measures, accelerate NPL resolution, reinforce bank capital buffers, and enhance liquidity oversight and bank resolution framework.
Structural reforms should focus on enhancing energy and food security, diversifying export markets, strengthening infrastructure, and promoting exports with higher domestic value-added to support stronger medium-term growth. Expedited labor market and social protection measures would help mitigate the impact of the border conflict and support returnees’ reintegration into the local labor market as productive members of the workforce.
AMRO thanks the Cambodian authorities and participating organizations for their cooperation and candid engagement during the mission.
About AMRO
AMRO is an international organization established to support macroeconomic resilience and financial stability of the ASEAN+3 region, comprising members of the Association of Southeast Asian Nations (ASEAN) and China; Hong Kong, China; Japan; and Korea. AMRO’s mandate is to conduct macroeconomic surveillance, support regional financial arrangements, and provide technical assistance to the members. In addition, AMRO also serves as a regional knowledge hub and provides support to ASEAN+3 financial cooperation.
AMRO Director/CEO Yasuto Watanabe, Chief Economist Dong He, and the AMRO team met with Serey Chea, Governor of the National Bank of Cambodia (NBC) and other senior officials from the NBC.
AMRO Director/CEO Yasuto Watanabe, Chief Economist Dong He, and the AMRO team met with Secretary of State at Ministry of Economy and Finance (MEF) Phalla Phan, and other senior officials from the MEF.