EuroCham: Private Sector Confidence Tested Amid Regional Pressures

PHNOM PENH, Cambodia(Nov.15, 2015) — Cambodia’s private sector faced a tougher business climate in the first half of 2025, with agriculture, food processing, and tourism companies hit hardest by external shocks, according to EuroCham Cambodia’s latest Business Pulse Report.

The survey, which captures responses from enterprises of all sizes, found that overall business sentiment weakened in early 2025 as regional instability and shifting trade dynamics weighed on confidence.

Revenue performance declined across most sectors, particularly real estate, construction, and professional services, while financial services companies reported modest gains. Nearly four in ten businesses said supply chains were disrupted by the Thailand–Cambodia border dispute, especially in logistics, agriculture, and tourism.

At the same time, new U.S. tariff announcements delayed investment decisions and increased cost pressures for exporters. Despite these challenges, the report highlights cautious optimism.

Demand in consumer products and financial services remained steady, and Cambodia’s reputation as an investment destination ticked upward, though respondents were reluctant to recommend entering the market.

Operationally, one-third of surveyed companies plan to reduce costs in the second half of 2025, mainly through staff cuts, reduced marketing, and lower training budgets. The U.S. dollar continues to dominate business transactions, while use of the Khmer riel and euro has declined.

“Access to reliable business information is vital for making informed decisions, yet first-hand market data remains hard to obtain in Cambodia,” said EuroCham Executive Director Martin Brisson.

“Our latest survey gives voice to members, offering fresh insights on market performance, forecasts, and the impact of issues like border disruptions and tariffs.”
Sectoral snapshots reveal uneven performance. In financial services, outstanding loans grew 2.9 percent year-on-year to US$61.8 billion by June, reflecting weak credit demand in real estate and construction, while deposits expanded 14.5 percent to US$61.5 billion.

Non-performing loans rose to 8.3 percent, up from 7.4 percent at the end of 2024, signaling rising credit risk. The microfinance sector also expanded, with loans reaching US$5.37 billion in the first quarter.

Tourism and hospitality showed signs of recovery, buoyed by stronger international arrivals and domestic travel. Cambodia welcomed 3.36 million foreign tourists in the first half of the year, up 6.2 percent year-on-year.

Angkor Archaeological Park alone received 567,673 international visitors, generating US$26.3 million in ticket revenue. Hotel supply in Phnom Penh rose modestly, while the new Techo International Airport is expected to open in the third quarter to further boost connectivity.

Agriculture and food processing posted strong export growth, with crop shipments rising 27 percent to 7.83 million tonnes worth US$2.87 billion. Non-rice crops contributed more than US$2 billion, while rice exports totaled US$945 million.

Cashew exports surged by 56 percent, though cassava, maize, and mangoes declined as more output was absorbed domestically. Imports of fertilizers and machinery also increased, reflecting efforts to improve productivity, though food processing remains underdeveloped, with only about 10 percent of agricultural output processed locally.

The Business Pulse H1 2025 Report concludes with a forward-looking analysis of cost pressures, investment sentiment, and sectoral priorities, offering guidance for policymakers and private sector leaders navigating an uncertain regional environment.