Agriculture sector contributes 16% to Cambodia’s GDP

Agriculture continues to play a central role in Cambodia economy, contributing 16.1 percent to the country gross domestic product in 2025. The figure, shared during the first Cambodia Agricultural Forum chaired by Dith Tina, Minister of Agriculture, Forestry and Fisheries, confirms that farming remains one of the backbone sectors of national growth. Although the contribution slightly declined from 16.7 percent in 2024, the sector still stands as a key pillar supporting economic stability and rural livelihoods across the country.

Steady Growth in Agricultural Value

While the percentage share has fluctuated, the overall value generated by agriculture has steadily increased over the years. As highlighted at the forum, “Although the contribution of the agricultural sector varies from year to year, the gross value added in agriculture has increased annually from 20,380 billion Riels in 2016 to 33,149 billion Riels in 2025,” underlined the forum. This upward trend reflects stronger productivity, improved farming techniques, and expanding domestic and international demand for Cambodian agricultural products. Farmers are increasingly embracing mechanisation to improve efficiency and reduce reliance on manual labour, a shift that is gradually modernising the sector.

From Food Insecurity to Global Contributor

Cambodia agricultural journey has been marked by a remarkable transformation. Once challenged by food shortages, the country now produces enough to ensure domestic food security and export millions of tonnes of products each year.

As Dith Tina noted, “The agricultural sector has made remarkable progress, transforming from a state of food insecurity to achieving domestic food security, and now the country exports millions of tonnes annually, contributing to global food security,” he said. This evolution highlights not only resilience but also the sector growing competitiveness in regional and global markets.

Strong Export Performance in 2025

Agricultural exports generated 6.46 billion US dollars in revenue in 2025, representing a 7.3 percent increase compared to 6.02 billion US dollars the previous year, according to the Ministry of Agriculture, Forestry and Fisheries. Cambodia key export products include rice, rubber, cassava, mangoes, bananas, peppercorn, cashew nuts, longans, and durians. These products continue to strengthen Cambodia trade profile and support incomes for millions of rural households.

Agriculture as a Strategic Economic Pillar

Agriculture remains one of four major pillars driving Cambodia economy, alongside garment, footwear and travel goods exports, tourism, and construction and real estate. Recognising its importance, the government has introduced a new strategic policy aimed at transforming agriculture from household based farming into more commercial operations. The focus is on increasing productivity, promoting value added processing, and boosting farmers income. The annual Cambodia Agricultural Forum will continue to serve as a platform for dialogue between government institutions, private sector leaders, and agricultural experts to ensure the sector stays competitive and sustainable.

Conclusion

In 2025, agriculture contributes 16.1 percent to Cambodia GDP, confirming its ongoing importance to the national economy. Despite a slight percentage dip compared to the previous year, the sector overall value continues to grow, exports are expanding, and farmers are adopting modern practices. With clear government strategies and rising global demand, agriculture remains a vital engine for economic resilience, rural development, and long term national prosperity.

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Foreign Visitor Numbers Fall During Peak Season at Angkor Park Early 2026

Why did Angkor Archaeological Park record a sharp drop in foreign arrivals during what is usually the busiest time of the year? According to Angkor Enterprise, the state owned agency responsible for ticket sales at heritage sites in Siem Reap province, the park welcomed 188,885 international tourists between January and February 2026. That figure represents a 32 percent decrease compared to the same period last year. As a result, revenue from ticket sales fell to 9.17 million US dollars, down 30 percent year on year. For a destination recognized globally by UNESCO and considered Cambodia’s crown jewel, such a decline during high season has raised serious concerns across the tourism sector.

Global Uncertainty Weighs on Travel Demand

Industry insiders and tourism experts say the slowdown cannot be viewed in isolation. Ongoing wars, economic uncertainty, and regional tensions have weakened global travel confidence. Khiev Thy, President of the Angkor Tourist Guide Association, voiced strong concern about the situation. “We are very concerned over the decrease in foreign visitors here. The early period of the year is the peak of the high season, but we see a declining arrival of foreign tourists because of the uncertain economic development, border tension, and war occurrence in some countries, which have interrupted tourists’ tours, including to Cambodia” Thy told Khmer Times yesterday. His remarks reflect growing anxiety among tour guides, operators, and small businesses that rely heavily on international visitors during the first quarter of the year.

Calls for Visa Reform and Stronger Air Connectivity

Tourism stakeholders are urging decisive action. Many believe visa free policies for key markets could help restore momentum, along with stronger international marketing campaigns to reinforce Cambodia’s image as a safe and welcoming destination. Another pressing issue is air connectivity. Insiders are calling for incentives to encourage airlines to increase direct flights to the Siem Reap Angkor International Airport, making travel more convenient and competitive. Without improved accessibility and aggressive promotion, experts warn that recovery could remain slow in the months ahead.

Government Steps In With Tax Incentives

In response to the downturn, the Royal Government has introduced a package of tax incentives for tourism businesses operating in Siem Reap province. The measures, effective from January through December, apply to hotels, guesthouses, restaurants, and travel agencies. The goal is to reduce financial pressure on operators while stimulating recovery in Cambodia’s primary tourism hub. At the same time, the Ministry of Tourism has strengthened collaboration with relevant institutions and private sector partners to promote Cambodia as a safe destination for global travelers. These efforts come after a challenging 2025, when entrance pass sales at Angkor Archaeological Park declined 7 percent to 44.7 million US dollars in revenue.

What Travel Agencies Should Prepare?

For travel agencies, this period calls for strategic adjustment rather than hesitation. Agencies should diversify target markets beyond traditional long haul travelers and explore regional opportunities within ASEAN and nearby countries. Flexible pricing strategies, bundled tour packages, and partnerships with airlines and hotels can help maintain competitiveness. Digital marketing should also be intensified, highlighting safety, cultural richness, and unique experiences at Angkor. Agencies may consider developing thematic tours such as heritage exploration, spiritual retreats, or eco cultural experiences to attract niche segments. Building resilience now will position operators to capture demand once global travel sentiment improves.

Commitment Beyond Tourism Revenue

Despite the financial setback, Angkor Enterprise continues to demonstrate social responsibility. The agency contributed approximately 377,770 US dollars to the Kantha Bopha Foundation to support free medical care for Cambodian children. This commitment underscores the broader social impact of tourism revenue and the importance of restoring visitor numbers for both economic and humanitarian reasons.

Conclusion

The drop in foreign visitors to Angkor Archaeological Park during the first two months of 2026 highlights the vulnerability of global tourism to geopolitical tension and economic uncertainty. While government incentives and policy discussions offer hope, travel agencies must adapt proactively through diversification, innovation, and stronger marketing. With coordinated efforts from public and private sectors, Siem Reap can regain momentum and reinforce its position as one of Southeast Asia’s most treasured cultural destinations.

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Middle East Conflict Pushes Global Oil Prices Higher

Cambodia is bracing for a possible 13 percent increase in fuel prices as global oil markets react to escalating conflict in the Middle East. Military attacks involving Iran, Israel and the United States, along with disruptions to the Strait of Hormuz, have sent shockwaves through energy markets. According to the BBC, oil prices jumped by 10 percent to 82 US dollars per barrel on Monday after missile launches across the region that began over the weekend. Iran has since blocked vessels from transporting or travelling via the Strait of Hormuz, a strategic waterway responsible for delivering about 20 percent of the world’s oil and gas supply. At least three ships were attacked near the straits, further intensifying concerns about supply disruptions.

Cambodia Faces a 13 Percent Fuel Price Increase

Analysts warn that these global developments will directly impact Cambodia, which relies entirely on imported fossil fuels. A projected 13 percent increase would push gasoline prices up by around 500 riel per litre, raising the cost from the current 3,850 riel to approximately 4,350 riel per litre. The increase is expected to take effect once existing fuel stocks run out and new shipments arrive at higher international prices. As Cambodia does not produce oil domestically, it remains highly exposed to external price shocks and supply chain disruptions.

Temporary Relief Measures and Government Intervention

Kampuchea Tela confirmed that gasoline prices at its stations are determined by international market rates. However, to ease the burden on citizens, Prime Minister Hun Manet ordered the continued reduction of retail gasoline prices by 6.5 US cents per litre or 250 riel per litre. As a result, gasoline prices at Tela stations are set to remain at 3,850 riel per litre, equivalent to 0.96 US dollars per litre, between March 1 and 10, 2026. The company noted on its Facebook page that prices could increase once current inventories are depleted. This temporary buffer provides short term relief, but it does not eliminate the risk of future price hikes.

Experts Warn of Prolonged Impact

Chey Tech, a socio economic analyst, explained that the conflicts in the Middle East as well as the ongoing war between Ukraine and Russia are placing immense pressure on global energy supply chains. “The Strait of Hormuz, which is a transit point for about 20 percent of the world’s oil, has been cut off by Iran. As a result, global oil prices are rising between 10 and 13 percent, which will clearly affect Cambodia,” he said. He cautioned that if the conflict drags on, fuel prices could reach an “unimaginable cost”. He also stressed that Cambodia should prepare for multiple scenarios given global uncertainties.

Royal Academy of Cambodia economics researcher Ky Sereyvath shared similar concerns. He noted that while the government’s use of existing fuel stocks helps stabilize prices in the short term, this strategy has limits. “The utilisation of the existing stock to maintain the stability of gasoline prices is a good thing as it does not result in citizens spending more on gasoline. [But] if the stock is running out and the war in the Middle East [continues], we will not be able to keep the same price. Therefore, we have to be prepared for the sharp increase in gasoline prices in the future,” he told Kiripost.

What Businesses and Cambodians Should Do Now?

With fuel costs likely to rise, businesses and households must take proactive steps to manage expenses. Companies that depend heavily on transportation and logistics should review their cost structures, improve fuel efficiency, and consider adjusting pricing strategies carefully to avoid sudden shocks to customers. Diversifying suppliers and optimizing delivery routes can help reduce fuel consumption. For ordinary Cambodians, reducing unnecessary travel, carpooling, maintaining vehicles properly, and planning fuel purchases wisely can make a meaningful difference. Businesses may also explore alternative energy options where feasible, such as solar power, to offset rising operational costs. On a broader level, Cambodia can strengthen fuel reserves, enhance supply chain resilience, and accelerate renewable energy development to reduce long term vulnerability to global oil volatility.

Conclusion

The anticipated rise in fuel prices highlights how closely Cambodia’s economy is tied to global events. As tensions in the Middle East disrupt major oil transportation routes, the ripple effects are being felt far beyond the region. While temporary government measures offer short term stability, both businesses and individuals must prepare for potential increases once current fuel stocks are exhausted. Careful planning, improved efficiency, and strategic policy responses will be essential to weather this period of uncertainty and protect livelihoods in the months ahead.

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Cambodia’s government has openly acknowledged that online scam centres are damaging the country’s economy and global investment reputation and says it is taking decisive action to dismantle them.

During an official visit to Brussels, Prime Minister Hun Manet told international media that cyber-scam operations are harming Cambodia’s economic narrative and undermining investor confidence. His remarks represent one of the clearest public recognitions at the highest level that scam networks pose not only a criminal issue, but a strategic economic risk.

Why Are Scam Centres Such a Serious Problem?

Over recent years, Cambodia has been identified as one of several Southeast Asian locations used by transnational criminal syndicates operating large-scale online fraud schemes. These scams have targeted victims globally through romance fraud, cryptocurrency investment schemes, and digital financial deception.

According to a 2024 report by the United States Institute of Peace, cyber-scam revenues linked to Cambodia may exceed $12.5 billion annually, an amount roughly equivalent to half of the country’s formal GDP. While independent estimates vary, the scale underscores how large the illicit ecosystem has become.

Many of these operations reportedly involve trafficked workers forced to operate under coercive conditions inside secured compounds. This human rights dimension has intensified international scrutiny and raised compliance concerns among foreign governments and multinational corporations.

Did Scam Centres Benefit Cambodia’s Economy?

Prime Minister Hun Manet acknowledged a sensitive reality: scam operations indirectly stimulated certain sectors, particularly real estate and construction tied to operational compounds. In some areas, property demand and short-term capital flows were influenced by these networks.

However, he stressed a critical distinction, illicit proceeds did not enter state revenue channels and should not be mistaken for legitimate economic growth.

For Cambodia’s formal business community, this distinction is essential. While short-term liquidity may have circulated in certain pockets of the economy, the reputational damage of being labelled a cybercrime hub poses far greater long-term risks. Export-oriented industries, tourism operators, financial institutions, and technology firms depend heavily on international trust.

What Concrete Actions Has the Government Taken?

Over the past year, Cambodian authorities have intensified enforcement efforts, resulting in thousands of arrests and the repatriation of foreign nationals linked to scam compounds. Operations have been conducted in coordination with regional partners, particularly China, Cambodia’s largest source of foreign direct investment.

One of the most high-profile cases involved the arrest and extradition of Chen Zhi in January. U.S. authorities had indicted him in late 2025 over allegations that his conglomerate, Prince Group, operated as a front for large-scale cyber-fraud activities.

U.S. prosecutors allege that operations connected to his network included forced labour compounds in Cambodia. Prince Group has denied the allegations.

Hun Manet stated that authorities were not aware of any alleged wrongdoing at the time Chen served as an adviser and took action once formal accusations emerged. He also confirmed that Chen’s Cambodian nationality was revoked after authorities determined fraudulent documentation had been used to obtain it, allowing extradition based on Chinese citizenship.

Why Is This Crackdown Economically Strategic?

Cambodia has spent more than a decade positioning itself as:

• A competitive manufacturing base integrated into global supply chains
• A destination for infrastructure and real estate investment
• A growing financial services and technology market
• A tourism hub in Southeast Asia

Continued association with cybercrime networks complicates access to correspondent banking relationships, heightens compliance scrutiny, and increases due diligence requirements for foreign investors.

For a country seeking long-term capital in manufacturing, logistics, financial services, and digital infrastructure, reputational risk directly affects cost of capital, investor appetite, and diplomatic leverage.

Hun Manet’s public acknowledgment signals recognition that economic credibility is inseparable from governance standards and regulatory enforcement.

What Will Determine Success?

For Cambodia’s private sector, the key question is not whether crackdowns occur but whether enforcement becomes consistent, institutionalized, and durable.

Sustainable growth requires:

• Clear regulatory frameworks
• Transparent enforcement mechanisms
• Strong anti-money laundering controls
• Protection of workers’ rights
• International cooperation in cross-border crime

If the government succeeds in separating the formal economy from illicit financial flows, it could strengthen Cambodia’s institutional credibility and unlock higher-quality investment.

If enforcement weakens or becomes selective, reputational risk will persist.

The Bigger Picture: Protecting Cambodia’s Next Growth Phase

Hun Manet, who took office in 2023, has sought to present a reform-oriented economic agenda while navigating regional geopolitical pressures. Addressing scam centres is now central to that agenda.

Cambodia’s next phase of development depends not only on infrastructure and trade agreements but also on governance credibility. Investors today evaluate jurisdictions based on compliance standards, anti-corruption enforcement, and financial transparency as much as labor costs or tax incentives.

By publicly confronting the issue and stepping up enforcement, the government is signaling that Cambodia’s long-term economic strategy prioritizes legitimacy over short-term illicit gains.

The effectiveness of this strategy will shape how global markets perceive Cambodia in the years ahead.

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As of the end of 2025, Cambodia has 3,083 large factories in operation. This marks a significant increase of 658 factories compared to 2024, representing growth of 27.13 percent, according to the Ministry of Industry, Science, Technology and Innovation. In simple terms, the Kingdom saw nearly 30 percent more large factories in just one year, a clear signal of accelerating industrial expansion.

This growth came despite 42 large factories closing during the year, compared to 26 closures in 2024. The net increase underscores the resilience and momentum of Cambodia’s manufacturing sector, even amid global uncertainty and regional pressures.

Where Are These Factories Located?

The distribution of factories highlights Cambodia’s key industrial hubs. Phnom Penh leads with 895 factories, followed by Kampong Speu with 603, Kandal with 403, Svay Rieng with 327, Preah Sihanouk with 305 and Takeo with 231. These provinces and the capital collectively form the backbone of Cambodia’s industrial ecosystem, supported by special economic zones, logistics connectivity and access to ports and borders.

The presence of large factories inside zones such as the Royal Group Phnom Penh Special Economic Zone reflects a broader strategy to cluster manufacturing operations in well serviced industrial parks that offer streamlined customs procedures and investor friendly infrastructure.

What Do These Factories Produce?

While garment manufacturing remains dominant, Cambodia’s industrial base is no longer limited to light industry. Factories are increasingly engaged in leather processing, paper and paper products, food processing, electrical equipment, rubber and plastic products, furniture, non metallic mineral products and timber goods.

This diversification indicates gradual movement up the value chain. The country is building stronger domestic production chains and integrating more deeply into regional and global supply chains, in line with national economic strategies.

How Many People Do They Employ?

By the end of 2025, factories across Cambodia employed approximately 1.27 million workers. This represents a 9.38 percent increase compared to 2024. The manufacturing sector remains one of the largest sources of formal employment in the country, supporting household incomes and domestic consumption while strengthening social stability.

Why Is the Number Growing So Fast?

Several structural factors explain this rapid expansion. According to economist Hong Vanak of the Royal Academy of Cambodia, reforms to investment laws, improved labour productivity and access to broad export markets have been critical drivers.

Cambodia has also benefited from bilateral and multilateral free trade agreements, competitive labour costs and a young workforce. Government reforms under its seventh mandate have focused on improving the business environment, strengthening competitiveness and promoting higher value added manufacturing.

The industrial sector grew by around 9.3 percent in 2025 and is projected to expand by 7.2 percent in 2026, despite challenges including border tensions with a neighbouring country. The sector has been identified as a strategic pillar under phase one of the Pentagonal Strategy, positioning industry, science, technology and innovation as key engines of long term growth.

What This Means for Investors and Business Leaders?

For investors, executives and policymakers, the figure of 3,083 large factories is more than a statistic. It reflects increasing investor confidence, deeper integration into global supply chains and expanding export capacity. Cambodia is evolving from a predominantly garment based manufacturing economy toward a more diversified industrial landscape.

The continued growth in factory numbers strengthens Cambodia’s export potential and enhances economic resilience. As production capacity scales and industrial capabilities broaden, the Kingdom is positioning itself as a more competitive manufacturing destination in Southeast Asia.

In 2025, the answer is clear. Cambodia is home to over 3,000 large factories and the trajectory remains upward.

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Growth Continues Despite Ongoing Challenges

Cambodia’s economy is moving forward with confidence, even as the country navigates challenges related to national sovereignty and territorial integrity. Speaking at the conference reviewing the 2025 results and outlining the work plan for 2026, Hem Vanndy, Minister of Industry, Science, Technology and Innovation, expressed optimism about the country’s economic outlook. He stated, “Despite facing challenges to national sovereignty and territorial integrity, Cambodia’s economy is projected to maintain solid growth, with an estimated 5.2% in 2025 and around 5% of GDP in 2026. This growth is primarily supported by key sectors: the industrial sector, expected to expand by approximately 7.2%; the service sector, by around 3.7%; and the agricultural sector, by 0.9%.” These projections signal resilience and steady progress at a time when global and regional uncertainties continue to test developing economies.

Industry Leads the Way Forward

Among the key drivers of growth, the industrial sector stands out as the strongest pillar of Cambodia’s economic expansion. With an expected growth rate of 7.2% in 2025, industry continues to power job creation, exports, and domestic production. The service sector is also playing a crucial role, projected to grow by around 3.7%, supported by trade, tourism, and other service related activities. Meanwhile, agriculture, though growing at a more modest 0.9%, remains an essential foundation for rural livelihoods and food security. Together, these sectors form a balanced structure that supports both economic stability and long term development.

Rising Income and Stronger Financial Position

Economic growth is translating into tangible improvements for citizens. GDP per capita is projected to increase to 2,858 US dollars in 2025 and could climb further to 3,020 US dollars in 2026. At the same time, Cambodia’s international reserves are expected to strengthen significantly, reaching 25,051 million US dollars in 2025 and 27,989 million US dollars in 2026. These figures reflect not only economic momentum but also improved financial resilience and macroeconomic stability, reinforcing investor confidence and strengthening the country’s ability to manage external shocks.

Foreign Investment Gains Momentum

Foreign direct investment continues to demonstrate strong momentum. According to the Council for the Development of Cambodia, registered foreign investment projects in 2025 reached approximately 10 billion US dollars, marking a remarkable 45% increase compared to 2024. This surge highlights growing international confidence in Cambodia as an attractive destination for manufacturing, innovation, and long term business expansion. Increased FDI inflows also provide capital, technology transfer, and employment opportunities that further stimulate economic growth.

Government Strategy and Long Term Vision

Recognizing the industrial sector as a primary engine of progress, the Royal Government continues to prioritize it as a strategic instrument for implementing the Pentagonal Strategy Phase 1. Industry is viewed not only as a driver of economic expansion but also as a catalyst for social development. This approach aligns with Cambodia’s broader ambition of achieving high income country status by 2050. By maintaining steady growth, strengthening key sectors, and attracting sustained investment, the government aims to build a resilient and competitive economy capable of delivering long term prosperity.

Conclusion

Despite external and internal challenges, Cambodia’s economic outlook remains positive and grounded in strong sectoral performance, rising incomes, and robust investment flows. With industry leading growth, improving financial stability, and clear strategic direction from the government, the country is steadily advancing toward its long term development goals. The coming years will be critical in sustaining this momentum and transforming economic gains into lasting prosperity for all Cambodians.

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