The IMF projects Cambodia’s economic growth to moderate to 4.8 percent in 2025

PHNOM PENH, Cambodia (Sept.03,2025) — Cambodia’s economy is expected to lose momentum in 2025 as external pressures mount, according to the International Monetary Fund.

Following a two-week consultation mission, the IMF projected real GDP growth to slow to 4.8 percent next year, down from 6 percent in 2024, citing “significant external headwinds from trade policy uncertainty and regional tensions.”

“Growth is expected to moderate… as trade tensions and the border dispute with Thailand—despite the recent ceasefire—begin to weigh on external demand, tourism, and remittance inflows,” said Kenichiro Kashiwase, who led the IMF team. Inflation is forecast to rise to 2.8 percent but remain contained.

The IMF warned that risks are “heavily tilted to the downside,” with high private sector debt and rising non-performing loans—particularly in tourism and real estate—posing threats to financial stability. “A carefully calibrated exit from regulatory forbearance is essential,” Kashiwase said, adding that strengthening supervision and crisis management frameworks is critical.

The Fund also urged Cambodia to accelerate structural reforms ahead of its graduation from Least Developed Country status by 2029. “There is a renewed urgency to improve productivity and competitiveness,” the statement said, highlighting governance, human capital, and anti-corruption efforts as key priorities.

In a separate update, the Ministry of Economy and Finance revised its 2025 growth forecast to 5 percent, down from an earlier projection of 6.3 percent. The ministry cited the impact of the border closure with Thailand and a 19 percent U.S. tariff on Cambodian exports.

“The revised projection reflects disruptions to manufacturing, transport and tourism, as well as reduced access to the U.S. market for garments, furniture and electronics,” the ministry said in a statement published here.

Industrial growth is now expected to reach 7.1 percent, services 3.8 percent, and agriculture just 0.9 percent.