# Cambodia: Economic Growth Poised to Strengthen Despite Persistent Challenges

- Link: https://www.thailand-business-news.com/asean/cambodia/201415-cambodia-economic-growth-poised-to-strengthen-despite-persistent-challenges
- Published: 2025-03-11T08:52:00+07:00
- Author: News Desk

**Cambodia’s GDP growth forecast has been revised to 5.9% for 2025, impacted by 
a struggling construction sector and potential US tariffs, below the government’s
6.3% estimate.**

**Key View **

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 * We have revised our forecast for Cambodia’s real GDP growth and now expect the
   economy to pick up from an estimated 5.7% in 2024 to 5.9% in 2025, down from 
   6.1% previously.
 * We expect that momentum in garment, travel goods and footwear (GTF) exports will
   in part be weighed down by the ongoing downturn in the construction sector.  
 * Risks are skewed to the downside. Not only will a slowdown in US economic activity
   weigh on Cambodia’s growth but Cambodia remains susceptible to the potential 
   imposition of reciprocal tariffs by US President Donald Trump. 

**Whereas we previously expected the Cambodian economy to expand by 6.1% in 2025,
we now forecast real GDP growth of 5.9%, up from an estimated 5.7% in 2024 – some
way below the government’s forecast of 6.3%. **While our forecast suggests that 
the economy will expand by less than its recent past where growth averaged 7.1% 
between 2015 and 2019 (see chart below, left), it will nonetheless outperform our
2025 growth forecast of 3.9% for emerging markets (EMs), excluding Mainland China(
see chart below, right). 

Cambodia’s economy has been on a growth trajectory, benefiting from a diverse array
of sectors including textiles, agriculture, and tourism. The World Bank projects
a rebound in growth rates as the country emerges from the shadows of the COVID-19
pandemic. This resurgence is expected to be fueled by increased investments, both
domestic and foreign, alongside a rising demand for Cambodian exports in key markets.

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However, Cambodia faces significant headwinds that could impede its growth. Infrastructure
bottlenecks, a lack of skilled labor, and environmental challenges pose ongoing 
threats to sustainable development. Moreover, the global economic landscape remains
uncertain, with potential recessions in major trading partners that could dampen
export demand and affect incoming tourism. These factors necessitate a robust policy
response to mitigate risks and harness growth potential.

To navigate these challenges, the Cambodian government is focusing on enhancing 
its economic resilience. Initiatives aimed at improving infrastructure, investing
in education, and diversifying the economy are paramount. By addressing these issues
head-on, Cambodia can build a more sustainable and inclusive economy, ensuring that
its growth benefits all citizens.
[Read More](https://www.fitchsolutions.com/bmi/country-risk/cambodia-growth-pick-headwinds-persist-07-03-2025)