Cambodia in 2025: Economic Resilience Amid Global Challenges and Domestic Transitions
Economic Outlook and Development
Cambodia’s economy is showing strong momentum with a projected GDP growth of 6.3 percent in 2025, marking a return to pre-pandemic levels, supported by stable inflation and a steady exchange rate.
The government has demonstrated its commitment to growth by prioritizing infrastructure development and improving connectivity within Cambodia and the ASEAN region, with a substantial budget of $9.32 billion approved for 2025.
Infrastructure and Tourism Development
A major milestone in Cambodia’s development is the launch of Techo International Airport in early 2025, designed to handle 13 million passengers annually. The tourism sector, which currently contributes approximately 12% of Cambodia’s GDP, is targeting 7.5 million international visitors in 2025, following a successful 2024 with 6.7 million visitors.
Challenges and Opportunities
As a small, open economy, Cambodia faces significant exposure to external shocks, complicated by domestic financial sector vulnerabilities. A pressing concern is the uncertainty surrounding new US tariffs, currently on hold for 90 days. Prolonged trade protectionism could impact growth through investment and trade channels.
To maintain sustainable growth, Cambodia needs key reforms focusing on inclusive growth, competitiveness, and natural resource management. The country continues to face a significant infrastructure gap and requires greater connectivity and investments in both rural and urban areas. Economic diversification will depend on fostering entrepreneurship, expanding technology use, and developing new skills for emerging labor market needs.
Future Outlook
Looking ahead, Cambodia’s graduation from least developing countries status in 2029 presents both challenges and opportunities, potentially affecting export competitiveness and borrowing costs. To address these challenges, the country requires a multifaceted policy response to enhance economic resilience in the face of global economic uncertainties.
