The industrial sector is set to drive Cambodia’s economic growth in 2025, with an anticipated expansion of 8.6%, according to the Budget in Brief Fiscal Year 2025 released by the Ministry of Economy and Finance. This follows a growth rate of 8.5% in 2024, cementing the sector’s pivotal role in the Kingdom’s development.
Despite facing domestic and international challenges, Cambodia’s economy is projected to grow by 6.3% in 2025. The industrial sector is expected to lead this progress with an 8.6% increase, supported by the services sector at 5.6% and the agriculture sector at 1.1%.
Key Sectors Driving Growth
The report attributes the robust growth of the industrial sector to the stability of both garment and non-garment manufacturing sub-sectors. The garment industry is nearing pre-pandemic growth levels, spurred by rising global demand and the implementation of the “Cambodian Garment, Footwear, and Bag Sector Development Strategy 2022-2027.” Meanwhile, the non-garment manufacturing sub-sector continues to expand due to sustained external demand. Growth in food and beverage manufacturing is also expected to remain positive.
However, the construction sector is projected to grow at a slower pace due to reduced foreign investment, particularly in tourism-related and commercial projects. Residential construction is also anticipated to grow below pre-pandemic levels.
The services sector, forecasted to grow by 5.6% in 2025, is buoyed by steady improvements in hospitality, food services, and tourism-related industries. The agriculture sector, with a modest projected growth of 1.1%, will be driven by positive trends in crop and livestock production, alongside a gradual recovery in fisheries.
Also Read, Cambodia’s Economic Growth in 2025: Key Sectors Driving Progress
Factors Supporting Economic Growth
Hong Vanak, an economist at the Royal Academy of Cambodia, highlighted political stability, reforms to investment laws, and the development of skilled human resources as significant factors contributing to increased investments. These efforts have particularly bolstered the establishment of factories and manufacturing enterprises aimed at exports.
Additionally, the government’s proactive approach to securing trade agreements with multiple countries has played a crucial role in attracting investors. Vanak remarked, “As more investors set up factories, exports will increase. The manufacturing sector will remain a key export commodity with great potential for Cambodia.”
With its strong performance in manufacturing and sustained growth in services and agriculture, Cambodia’s economy appears well-positioned to navigate the challenges ahead and sustain long-term development.
Source: Phnom Penh Post
