The Asian Development Bank (ADB) has reaffirmed Cambodia’s economic resilience despite global and regional challenges. In its Asian Development Outlook (ADO) September 2025 report, the ADB projected Cambodia’s GDP growth at 4.9 percent in 2025 and 5.0 percent in 2026, reflecting a slight adjustment from earlier forecasts but still pointing to a stable growth trajectory.
Resilient Outlook Despite Challenges
The revisions take into account ongoing border frictions with Thailand, uncertainties in the United States export market, and softer tourism inflows. Even with these headwinds, the ADB underscored that Cambodia’s economic fundamentals remain sound, with growth expected to be sustained close to 5 percent over the next two years.
Inflation Easing, Stability Strengthened
The ADB noted that inflation eased sharply from 6 percent in January 2025 to just 1.6 percent by midyear, driven by lower food and fuel prices. Inflation is forecast to average around 2 percent in both 2025 and 2026, creating relief for households and businesses. With public debt at around 26 percent of GDP, foreign reserves covering seven months of imports, and a prudent fiscal stance, Cambodia retains strong buffers to navigate near-term shocks.
Industry and Exports Drive Growth
Industry continues to be the backbone of the economy. The ADB report highlighted that garment exports grew over 22 percent year-on-year in the first half of 2025, with manufacturing activity holding firm despite tariff-related risks. Agriculture is also expected to grow steadily, supported by strong demand for rice and cashew nuts, even as cassava and rubber exports softened.
Services and Tourism Gradually Recovering
The services sector is projected to expand more moderately, with growth of 2.8 percent in 2025 and 2.6 percent in 2026. Tourism has shown a solid rebound, particularly from Chinese arrivals, though regional tensions may temporarily affect the pace of recovery. Longer-term, investment in higher-value tourism infrastructure is expected to boost the sector’s competitiveness.
Building Long-Term Resilience
According to the ADB, Cambodia’s ability to maintain momentum lies in strengthening industrial competitiveness, diversifying exports, and advancing structural reforms. Upgrading logistics networks, expanding agro-processing, and investing in technical and vocational training will enhance resilience. At the same time, efforts to expand renewable energy, improve efficiency, and climate-proof agriculture and infrastructure are positioning the country for green and sustainable growth.
Positive Path Ahead
The ADB emphasised that with prudent fiscal policy, structural reforms, and targeted support to vulnerable sectors, Cambodia can balance short-term stability with long-term competitiveness. Regional integration through ASEAN and RCEP, combined with investment in skills, SMEs, and digital transformation, will ensure the economy remains dynamic and inclusive.
While challenges remain, the ADB’s outlook reflects confidence in Cambodia’s ability to sustain steady growth, build resilience, and move toward a greener, more diversified future.
