IMF Projects Cambodia's Economic Growth to Slow to 3 Percent in 2026

The International Monetary Fund has projected Cambodia's economic growth will slow to 3 percent in 2026, down from 5.3 percent in 2025. Contributing factors include higher energy costs, weakening tourism, declining remittances, and decelerating garment exports. Inflation is forecast at 5.6 percent in 2026, while the current account deficit is expected to widen. Growth is projected to partially recover to 4 percent in 2027.

The IMF projected on Tuesday that Cambodia's economy would expand by just 3 percent in 2026, down from 5.3 percent the previous year, citing higher energy prices, reduced tourism activity, and lower remittance flows as contributing factors. The country, whose economy depends substantially on garment manufacturing, footwear, travel goods, agriculture, tourism, and real estate, is contending with a combination of internal and external pressures, with the IMF projecting in a press release that output expansion would decelerate to 3 percent in 2026 before returning to 4 percent in 2027, driven by elevated energy costs, reduced tourism and remittance inflows, slower garment export growth, restrained domestic consumption, and tighter financial conditions, while inflation is forecast to hold at 5.6 percent in 2026 before moderating as energy prices stabilise. Forecasts point to a notable expansion in the current account deficit, though steady inflows of foreign direct investment and sufficient international reserves act as stabilising cushions. The IMF noted that the outlook for expansion faces greater downside than upside pressure, with potential headwinds including renewed disruptions to energy and trade, ongoing fraudulent activities, and a more pronounced correction in the property market. The statement noted that weather disruptions tied to El Niño patterns may sustain upward pressure on food and agricultural prices.

IMF Projects Cambodia's Economic Growth to Slow to 3 Percent in 2026

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IMF Projects Cambodia's Economic Growth to Slow to 3 Percent in 2026

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