PHNOM PENH: Cambodia's economy has remained resilient, but growth is projected to slow in 2026 amid higher energy prices, trade policy uncertainty, weak tourism and subdued domestic demand, the International Monetary Fund (IMF) said on Wednesday (July 8).
The South-East Asian country's economy mainly relies on garment, footwear and travel goods exports, tourism, agriculture, and real estate and construction.
Kenichiro Kashiwase, the IMF mission chief for Cambodia, said that economic growth is projected to slow to three per cent in 2026 from 5.3 per cent in 2025, before recovering in 2027.
He added that higher energy prices, softer external demand and reputational damage from online scam activities are weighing on economic activity, weakening tourism and risking financial stability.
"Foreign direct investment remained strong and international reserves remain adequate at about eight months of imports," he said in a press release.
Kashiwase said inflation averaged 2.5 per cent in 2025 but rose sharply in May 2026, and is projected to average 5.6 per cent in 2026, reflecting the pass-through of higher energy prices.
Inflation is projected to moderate in 2027, he said, adding that the riel currency has remained broadly stable, serving as a nominal anchor for the economy.
"Risks to the outlook are tilted to the downside for growth and to the upside for inflation," he said. "Higher or more volatile energy prices, economic impacts of El Nino, trade policy uncertainty and weaker tourism demand could weigh on activity."
Kashiwase added that domestically, financial sector vulnerabilities, real estate weakness and asset-quality deterioration remain key risks. - Xinhua
