Cambodia orders 30% budget cuts amid global energy uncertainty

PHNOM PENH, Mar. 23, 2026 (KPT) — Cambodia has introduced sweeping budget control measures, including a 30 percent reduction in key expenditures, as the government seeks to contain fiscal pressures from volatile global energy markets, officials said Monday.

The Ministry of Economy and Finance issued a directive requiring ministries and state institutions to rationalize spending under the 2026 national budget, stressing the need to safeguard priority sectors while maintaining fiscal discipline. The move comes as geopolitical tensions in the Middle East disrupt supply chains and push up fuel prices worldwide.

Fuel and lubricant allocations will be cut by 30 percent, though reserves must be maintained for essential operations. Similar reductions apply to domestic and overseas mission expenses, with officials encouraged to shift meetings online to reduce travel costs.

Defense and public security are exempt, but must still operate within approved ceilings unless exceptional needs arise. Courts and sub national administrations in health and education are also spared, though they must adopt strict energy saving practices.

The directive calls for stronger prioritization of public spending, urging ministries to redirect funds from non essential activities toward high impact areas, while improving efficiency and value for money. Government institutions are advised to limit participation in overseas meetings to those deemed strategic, with Cambodian embassies encouraged to represent the country when possible.

The measures are designed to ensure the continued functioning of state institutions while supporting policy priorities. Cambodia has already introduced energy saving initiatives across ministries to reduce fuel and electricity consumption, part of broader efforts to mitigate the impact of rising global energy prices.

Despite external pressures, authorities stressed the country remains committed to economic stability and resilience against global shocks. Fuel prices remain stable, with regular gasoline at 5,400 riel ($1.35) per liter and diesel at 6,700 riel ($1.67).