Cambodia’s Economy Set for 4.5% Growth in 2026

Cambodia’s economy is forecast to expand by 4.5% in 2026, provided global commodity markets stabilise following the conflict in the Middle East, according to the Asian Development Bank’s latest outlook.

The ADB’s April report highlights manufacturing as the key driver of growth, with industrial output expected to rise by 7.3%. Strong garment orders remain central, but non-garment sectors such as electrical components, tyres and furniture are increasingly contributing to the country’s industrial base. Agriculture is projected to grow modestly at 0.9%, supported by rice and cashew exports, alongside government initiatives to reintegrate returning migrant workers and promote sustainable practices.

Services, however, are expected to slow, with growth dipping to 2.3% in 2026 as the economy adjusts to the closure of the Thai border. Despite this, foreign direct investment has remained robust, with approved fixed asset investment rising by 45% in 2025, signalling investor confidence in Cambodia’s diversification into higher-value production.

Inflation is forecast to edge up to 2.8% next year, assuming fuel prices stabilise. A prolonged shock could raise costs across agriculture, manufacturing and tourism, while the fiscal deficit is expected to widen as spending increases to support vulnerable households.

ADB Country Director Yasmin Siddiqi said Cambodia’s resilience remains evident despite external pressures. “Manufacturing remains solid, and ongoing government efforts to bolster the tourism sector will help maintain economic momentum despite global challenges,” she noted, stressing the importance of workforce development and public–private collaboration in skills training.

Looking ahead, growth is projected to strengthen to 5.0% in 2027, contingent on improving external conditions and continued domestic reforms. Achieving Cambodia’s long-term ambition of becoming a high-income economy by 2050 will hinge on sustained productivity gains and investments in human capital.

For now, the outlook suggests Cambodia’s economy is weathering global turbulence with a steady hand, relying on manufacturing strength and reform momentum to keep growth on track.

-2026-04-12