Cambodia Eyes 5% Growth in 2026 Amid Global Turmoil

PHNOM PENH, Jan 20, 2026 (KPT) — Cambodia’s economy is expected to expand by around 5 percent in 2026, despite mounting global and regional uncertainties linked to geopolitical tensions and economic fragmentation, the Ministry of Economy and Finance said Monday.

At the launch of a new government program to boost competitiveness, diversification and resilience, Deputy Prime Minister and Finance Minister Aun Pornmoniroth said Cambodia had rebounded strongly from the COVID-19 crisis and remained on a solid growth trajectory.

He noted that while the global environment remains volatile — with supply chain disruptions, rising protectionism and geopolitical risks — Cambodia’s economy is projected to grow by 5.2 percent in 2025 and about 5 percent in 2026.

Since the start of the 7th National Assembly mandate, the government has rolled out the Pentagon Strategy Phase I, aimed at improving the business climate and attracting investment. This has helped sustain strong inflows of foreign direct investment.

According to the Council for the Development of Cambodia, registered foreign investment projects reached USD 10 billion in 2025, up 45 percent from the previous year. Exports rose more than 17 percent, while tourism — particularly from long-haul markets such as Europe, Australia and India — continued to recover.

To safeguard growth, the government unveiled a three-pillar policy package under its new competitiveness program. It extends tax exemptions, incentives and deferrals to sectors facing slower growth, including agriculture, tourism, construction, real estate, education, aviation and the arts.

It also seeks to improve the investment climate, promote local production, expand social protection, ensure environmental sustainability and develop special economic zones in provinces such as Battambang, Pursat, Banteay Meanchey, Pailin, Siem Reap and parts of the northeast.

Finally, the government aims to better utilize existing free trade agreements, diversify export markets, prepare for stricter global standards, deepen financial sector development and promote technology and innovation.

Officials said the strategy is designed to make Cambodia’s economy more competitive, diversified and resilient as it navigates an increasingly uncertain global landscape.