Experts Warn Cambodia’s Slowdown in 2026 Will Hit Key Sectors but Economy Poised for Rebound in 2027

PHNOM PENH, Cambodia (Dec. 3, 2025) — Cambodian economists have cautioned that the Kingdom’s projected slowdown in 2026 could place pressure on several of its most important sectors, even as the country positions itself for recovery the following year.

Forecasts show Cambodia’s economy is expected to grow by only 4 percent in 2026, a marked slowdown from 6 percent in 2024 and 4.8 percent in 2025, according to the International Monetary Fund’s Article IV Consultation completed in November. The IMF cited export volatility, weaker tourism, declining remittances and financial vulnerabilities as key risks.

Hong Vannak, an economist at the Royal Academy of Cambodia, said tourism, real estate and agriculture are likely to feel the most impact. He attributed the slowdown to global and regional shocks, including post-pandemic disruptions, wars in Europe and the Middle East, protectionist trade policies and maritime tensions in Asia. Border challenges with Thailand have added uncertainty to investment and cross-border trade.

“This slow growth is not happening only in Cambodia,” Vannak said. “Many ASEAN and global economies are facing the same pressures since COVID-19.”

Despite the outlook, Cambodia has seen positive developments in 2025. Domestic tourism has risen sharply, while agricultural exports to China have supported agro-processing momentum. Bilateral trade with China reached $15.95 billion from January to October 2025, up 28.9 percent year-on-year, though Cambodia continues to run a large deficit.

The government has also approved a $10 billion national budget for 2026, representing nearly 19 percent of GDP, with priorities including defense, state operations and reforms under the Pentagon Strategy Phase I. Fiscal measures include suspending income tax for agricultural producers and extending VAT exemptions on staple foods until 2028.

Vannak said these policies, combined with political stability and expanded trade partnerships, could help Cambodia rebound strongly in 2027. “Even with slower growth, Cambodia still has forward momentum,” he said. “With the right stability and government support, we can expect stronger performance in 2027.”