Phnom Penh (VNA) – The World Bank has revised its 2025 economic growth forecast for Cambodia down to 4% from the April prediction of 5.5%.
The move was driven by global and domestic challenges, shifting trade policies, a prolonged downturn in the real estate sector, and tightening credit cycles which have presented significant obstacles for Cambodia’s economy.
In a recent press release, the WB noted that Cambodia's economy has shown resilience, largely thanks to strong exports and a partial revival in private consumption, despite heightened global uncertainty. It warned that to maintain growth amid uncertainty, the country will need to focus on diversifying its economy and creating an enabling environment for private sector investment and job creation.
According to the WB’s Cambodia Country Economic Update: Navigating Uncertainty with a special focus section entitled “Strengthening Revenues for Cambodia’s Future”, Cambodia’s economic growth is projected to slow to 4.0% in 2025 and 4.5% in 2026.
Tania Meyer, WB country manager for Cambodia, noted that economic diversification is critical for the country to sustain growth and job creation amid uncertainty, especially by moving beyond its reliance on construction and garment exports and promoting higher value-added manufacturing and services.
She added revenue reforms can support a better business environment while generating fiscal space for critical investments in human capital and infrastructure.
The WB noted that in this year's first quarter, Cambodia's exports, especially garments, travel goods, footwear, and bicycles, grew by 11.6% year-on-year. Tourism services saw an increase of 16.1% in international arrivals, albeit remaining below 2019 levels.
Meanwhile, private consumption recovered as evidenced by increased imports of consumption goods, including foodstuffs, garments, cars, and motorcycles.
Externally, rising remittances and tourism revenues offset a widening trade deficit, with reserves reaching 24.7 billion USD. Broad money growth hit 19.0% year-on-year, driven by favourable monetary conditions. Inflation picked up slightly to 3.7%, mainly due to food prices, while financial sector asset quality deteriorated, with higher non-performing loan ratios, it added.
The Cambodian General Department of Customs and Excise (GDCE) reported that during the first five months of 2025, total international trade amounted to 25.29 billion USD, an 18.5% increase over the same period in 2024. Of that, exports reached 11.8 billion USD, up 17.2%, while imports rose to 13.49 billion USD, a 19.7% increase.
Beyond international trade, the Council for the Development of Cambodia, which oversees investment for the government, approved 290 investment projects in the first five months, up by 137 projects or roughly 90% compared to the same period in 2024. Total expected investment capital reached 4.2 billion USD, a 1.4 billion USD or 52% increase year-on-year./.
