Cambodia's growth projected to fall to 4.8% in 2025, 4% in 2026: IMF

Tariff effects will lower export earnings as manufacturers in the country face margin pressures.

Inflation is projected to rise modestly in 2025 before easing in 2026, said the IMF, which recently completed its Article IV Consultation for the country.

Risks are tilted to the downside, with financial sector vulnerabilities at the centre, it said in a release.

Trade policy uncertainty could further disrupt export growth. Renewed border tensions could undermine confidence, amplifying adverse effects on domestic demand, tourism, and financial sector stability.

Elevated private debt, rising non-performing loans and governance vulnerabilities could further amplify risks to financial stability.

On the upside, deeper regional trade and investment integration could promote export growth. Successful reintegration of returned workers into the domestic labour market could support a stronger recovery in domestic demand.

Cambodia’s economy continued to accelerate in 2024, and growth reached 6 per cent, bolstered by a strong rebound in garment and agricultural exports and a continued recovery in tourism.

This trend continued into the first half of 2025, with nowcasting estimates pointing to year-on-year (YoY) growth of 6.2 per cent. However, a confluence of shocks—trade disruptions, border tensions and anaemic credit growth—exposed the economy’s vulnerabilities, and signs of economic slowdown are emerging in the second half of 2025, the IMF observed.

ALCHEMPro News Desk (DS)