IMF Projects Cambodia’s Growth to Slow to 4.8% in 2025 Amid Rising Risks

PHNOM PENH, Cambodia (Nov. 26, 2025) — Cambodia’s economic growth is projected to slow to 4.8 percent in 2025 and further to about 4.0 percent in 2026, according to the International Monetary Fund (IMF)’s latest Article IV Consultation.

The IMF said the downward revision reflects weaker remittances and a slowdown in tourism, which are expected to weigh on domestic demand, while tariff effects will pressure export earnings.

The IMF noted that Cambodia’s economy expanded by 6.0 percent in 2024, supported by a rebound in garment and agricultural exports and a recovery in tourism. Growth continued into the first half of 2025, with nowcasting estimates showing year-on-year growth of 6.2 percent. But trade disruptions, border tensions and weak credit growth have exposed vulnerabilities, with signs of deceleration emerging in the second half of the year.

Risks remain tilted to the downside, the IMF said, citing financial sector fragilities, trade policy uncertainty and renewed border tensions that could undermine confidence and dampen domestic demand. Elevated private debt, rising nonperforming loans and governance challenges could further weigh on financial stability. On the upside, deeper regional trade and investment integration and the reintegration of returned workers into the labor market could support stronger demand.

The IMF Executive Board cautioning that Cambodia’s recovery remains uneven and vulnerable due to reliance on a narrow export base. Directors urged authorities to safeguard macroeconomic stability through coordinated fiscal, monetary and structural policies.

They said fiscal policy should cushion the impact of current shocks while maintaining prudence, with targeted support for vulnerable households and displaced workers. Over the medium term, gradual consolidation is needed to rebuild buffers and ensure sustainability, supported by stronger revenue mobilization and improved expenditure efficiency.