A bird’s-eye view of Phnom Penh by night shows some of the capital’s many tall building projects. Post staff
Global and domestic challenges, shifting trade policies, a prolonged downturn in the real estate sector and tightening credit cycles have presented significant obstacles for Cambodia’s economy. As a result, the World Bank has revised its 2025 economic growth forecast for Cambodia down to 4.0%.
In April, the World Bank projected that Cambodia’s economy would grow by 5.5% in 2025.
In a June 11 press release, it noted that Cambodia's economy has shown resilience, largely thanks to strong exports and a partial revival in private consumption, despite heightened global uncertainty. It warned that to maintain growth amid uncertainty, the Kingdom will need to focus on diversifying its economy and creating an enabling environment for private sector investment and job creation.
According to the World Bank’s Cambodia Country Economic Update: Navigating Uncertainty with a special focus section entitled “Strengthening Revenues for Cambodia’s Future”, released today, Cambodia’s economic growth is projected to slow to 4.0% in 2025 and 4.5% in 2026.
“Economic diversification is critical for Cambodia to sustain growth and job creation amid uncertainty, especially by moving beyond its reliance on construction and garment exports and promoting higher value-added manufacturing and services,” noted Tania Meyer, World Bank country manager for Cambodia.
“Revenue reforms can support a better business environment, while generating fiscal space for critical investments in human capital and infrastructure,” she added.
According to the World bank, in Q1 of this year, Cambodia's exports, especially garments, travel goods, footwear and bicycles grew by 11.6% year-on-year. Tourism services saw an increase of 16.1% in international arrivals, albeit remaining below 2019 levels. Meanwhile private consumption recovered, as evidenced by increased imports of consumption goods, including foodstuffs, garments, cars and motorcycles.
Externally, rising remittances and tourism revenues offset a widening trade deficit, with reserves reaching $24.7 billion. Broad money growth hit 19.0% year-on-year, driven by favourable monetary conditions. Inflation picked up slightly to 3.7%, mainly due to food prices, while financial sector asset quality deteriorated, with higher nonperforming loan ratios, it added.
The General Department of Customs and Excise (GDCE) reported that during the first five months of 2025, total international trade amounted to $25.29 billion, an 18.5% increase over the same period in 2024. Of that, exports reached $11.8 billion, up 17.2%, while imports rose to $13.49 billion, a 19.7% increase.
Beyond international trade, the Council for the Development of Cambodia (CDC), which oversees investment for the government, approved 290 investment projects in the first five months of 2025 — up by 137 projects or roughly 90% compared to the same period in 2024. Total expected investment capital reached $4.2 billion, a $1.4 billion or 52% increase year-on-year.
