Cambodia’s economy is projected to experience a slowdown in 2025 and 2026, driven by the impact of US tariffs and challenges in the real estate sector, while inflation remains sensitive to food prices and global commodity market fluctuations. Additionally, the country’s export-driven industries may face heightened competition from neighboring nations, further straining economic growth. Efforts to diversify the economy and strengthen domestic production will be crucial for mitigating these challenges and ensuring long-term stability.
Economic Outlook
Cambodia’s economy is expected to see a moderation in growth in 2025 and 2026, following a robust 6.0 percent expansion in 2024. This slowdown is largely due to the impact of U.S. tariffs and a cooling real estate market. Despite these challenges, the services sector is anticipated to maintain its strength, providing some support to the overall economy.
Inflation Trends
Inflation remains a concern due to fluctuating food prices. While it has been on a downward trend, uncertainties persist. The headline consumer price index (CPI) inflation is projected to rise to 2.5 percent in 2025, influenced by base effects, before easing to 2.3 percent in 2026. This aligns with pre-pandemic levels, but global commodity price shifts could pose inflationary challenges.
Commodity Price Impact
The inflation path remains uncertain due to rapid pass-through from commodity prices. If global commodity prices rise sharply, it could lead to intensified inflationary pressures in Cambodia. Monitoring these price shifts will be crucial for anticipating and managing future economic impacts.
Source: AMRO’s 2025 Annual Consultation Report on Cambodia – ASEAN+3 Macroeconomic Research Office
