Cambodia’s economy continued its robust growth while inflation remained relatively low in 2018. Real GDP growth is estimated to accelerate to 7.2 percent in 2018 and remain strong at 7.1 percent in 2019. Inflation is expected to remain relatively stable at 2.6 percent in 2018, on account of better supply conditions despite pressures from rising energy prices. The major downside risks stem from external factor related to a potential suspension of the Everything But Arms status which would substantially weaken its export competitiveness in the EU market. From the domestic side, the major risk stem from weakening external competitiveness due to a rapid increase in labor costs. Efforts to enhance the economy’s competitiveness should, therefore, be continued in order to sustain high growth momentum and resilience in the long-term. Improving infrastructure and human resources is also essential to promote economic diversification and enhance overall competitiveness. In this regard, rebalancing budget allocation to better address infrastructure and human development gap is critical.