As Cambodia marches forward with ambitious economic plans, 2025 holds the promise of significant growth and transformative opportunities. With a projected GDP of over $51 billion and a growth rate of 6.3%, Cambodia’s economy appears poised for substantial expansion, driven by diverse sectors. For businessmen and investors, understanding these trends is crucial for strategic decision-making.

Economic Overview: A $51 Billion Milestone

The Royal Government of Cambodia anticipates the nation’s GDP to reach approximately 209,163 billion riels ($51.39 billion), with GDP per capita expected to rise to $2,924 in 2025, up from $2,713 in 2024. This projection reflects consistent momentum across industries, services, and agriculture.

Despite this optimistic outlook, experts like Hong Vannak from the Royal Academy of Cambodia caution that the projected per capita GDP might not fully capture the challenges on the ground, such as inflation, household debt, and declining personal savings.

Nonetheless, the government’s vision to achieve upper-middle-income status by 2030 and high-income status by 2050 underscores its commitment to sustainable economic growth.

Key Sectors Driving Cambodia’s GDP Growth

1. Industrial Sector (8.6% Growth)

The industrial sector is expected to lead the charge with robust performance in both garment and non-garment manufacturing:

• Garments and Footwear: The ‘Cambodia Footwear and Bag Development Strategy 2022-2027’ aims to enhance the country’s global competitiveness.
• Non-Garment Manufacturing: Industries like automotive assembly and electronics benefit from export growth and SME-focused government policies.
• Food and Beverage Production: Increased domestic demand and export opportunities drive growth in this subsector.
• Construction: While growth in 2025 may be moderate due to subdued foreign investment, long-term prospects remain promising with industrial and commercial construction activities gaining traction.

2. Service Sector (5.6% Growth)

The service sector will play a pivotal role in driving economic growth, particularly through:

• Tourism and Hospitality: Initiatives like the ‘Siem Reap Tourism Master Plan 2021-2035’ and ‘Visit Siem Reap 2024’ aim to revitalize the sector post-pandemic.
• Transport and Warehousing: Infrastructure improvements under the ‘Inter-Transport and Logistics Master Plan 2023-2033’ support this growth.
• ICT and Financial Services: Policies like the ‘Financial Technology Development Policy 2023-2028’ and the ‘Digital Economy Framework 2021-2035’ foster modernization and innovation.
• Real Estate: Focus shifts to affordable housing for low- and middle-income populations, balancing demand and affordability.

3. Agricultural Sector (1.1% Growth)

Agriculture remains a cornerstone of Cambodia’s economy, although its growth is modest compared to other sectors.

• Crops: Investments and free trade agreements boost exports of rice, cassava, and other crops.
• Livestock: Recovery efforts aim to offset challenges like import restrictions on frozen meats.
• Fisheries: Anti-illegal fishing measures and aquaculture investments enhance sustainability and productivity.

Opportunities for Business and Investment

1. Export-Oriented Industries

The garment sector continues to thrive, while emerging industries such as automotive assembly and electronics offer new opportunities. Cambodia’s integration into regional and global supply chains provides a fertile ground for export-focused enterprises.

2. Tourism and Real Estate

Tourism rebounds with an emphasis on sustainable development, creating avenues for investments in hotels, resorts, and related infrastructure. Meanwhile, the housing market offers potential for developers targeting affordable housing.

3. Technology and Innovation

The push for digital transformation opens doors for ICT companies, fintech startups, and investors in automation and AI solutions.

4. Infrastructure and Logistics

The government’s focus on transport and logistics infrastructure paves the way for investments in warehousing, freight services, and logistics hubs.

5. Agricultural Modernization

Investors can explore opportunities in modern farming techniques, agro-processing, and exports underpinned by free trade agreements.

Challenges to Consider

Despite the optimistic outlook, potential investors should be aware of the following challenges:

• Household Debt and Inflation: High debt levels and rising costs could dampen consumer spending and economic resilience.
• Geopolitical and Global Economic Uncertainties: Trade tensions and global market fluctuations may impact Cambodia’s export-driven industries.
• Slower Construction Growth: Subdued foreign investments in construction may delay large-scale projects.

Vision for 2030 and Beyond

Cambodia’s GDP growth in 2025 marks another step toward achieving the government’s long-term economic goals. With continued focus on policy reforms, infrastructure development, and sectoral diversification, the country is well-positioned to transition into an upper-middle-income economy by 2030.

Conclusion

For businesses and investors, Cambodia offers a promising landscape of growth opportunities across multiple sectors. By aligning their strategies with the country’s economic trends, stakeholders can leverage Cambodia’s dynamic market to drive success in 2025 and beyond.

Are you ready to expand your business or invest in Cambodia’s growing economy? Share your thoughts and strategies for success in 2025!

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Minutes after President Trump read out the reciprocal tariffs on April 3, all hell broke loose in most economies across the globe. Cambodia was imposed a staggering 49 percent tariffs. Trumpism at its worst – was what some leading economists told Khmer Times. In a way, they are not entirely wrong. But since then, two principal developments took place: One, Cambodia and the United States started negotiating to find an amicable way out. Two, as some avid watchers suggest, what if talks fail or what options are left with the Royal Government to address the crisis? It’s the latter that today’s Explainer discusses. As one of the top priorities, Cambodia must step up its economic diversification with a leading thinker suggesting that the Kingdom will have to focus on FDI emerging mostly from non-Chinese sources. Future diversification from intra-sectoral specialisation, or diversification within sectors, will make Cambodia more resilient, and “less heavy reliance on the US market alone”. An independent Cambodia can well bargain with the mighty US, but only to a certain degree.

Early this month, Cambodia, along with 90 other nations, woke up to shocking news. US President Donald Trump’s sweeping reciprocal tariffs left the economies of many countries in mayhem.

A staggering 49 percent tariffs were imposed on Cambodia’s exports to the world’s largest economy.

For months, since President Trump assumed office, discussions on tariff onslaught dominated the meetings of ministries concerned and intellectuals in Phnom Penh, yet hardly anyone expected Cambodia to become one of the worst victims.

The impact of the Trumpism shock was so widespread that not only it was felt by the policymakers, entrepreneurs, diplomats or SME owners but also trickled down to the semi-skilled workers employed by the textiles, footwear and travel goods sector – one of the largest labour segments in the country estimated to be hosting nearly a million.

What will happen to Cambodia’s economy now? Will it affect the GDP growth? What about the LDC graduation that is scheduled to happen in 2029? Why did Trump take this step? Is Cambodia’s strong bilateral, diplomatic and economic ties with China the reason? Multiple questions continue to fill the air, though there seems to be no specific one-size-fits-all answer.

Making of Trumpism

Speaking to Khmer Times, Vikas Reddy, a researcher in economics and international relations at Ohio University, said Trump took the decision after believing his conservative advisors to boost the manufacturing sector and win over his core electorate.

“If you look at the people who voted in blocks to Trump, you can easily find that all Caucasians, African Americans, Asians and Latinos, who just had a high-school diploma or lower stood as his firm supporters. And this is his core electorate, who once formed the major working class in the manufacturing sector, be it automobiles, steel or electronics.

“With these tariffs in, Trump and his advisors believe that there will be a revival in the local manufacturing, boosting the goodwill of tycoon-turned President.”

Vikas said Trump also want to settle scores with Jerome Powell, who has refused to reduce interest rates citing inflation despite the President asking him multiple times to do so. “It’s more of an internal political battle than an external battle. Tariffs will certainly further fuel inflation, which has remained a great headache for the Fed Reserve in the last few years.

“Trump wants to end quantitative tightening and this is one of the ways to force Powell to do so.”

Vikas also singled out the ‘DOGE’ factor. DOGE is a new advisory body created by Trump and led by Elon Musk, the world’s richest man who has been tasked with cutting US government jobs and other spending. Elon Musk has repeatedly said that he remains confident about DOGE finding $1 trillion in savings, slimming current total federal spending levels of about $7 trillion down to $6 trillion.

“Tariffs are supposed to generate $700 billion, though there are opposing claims, every year. And this would contribute towards reducing the fiscal deficit as envisaged by the DOGE.

“And the most important thing Trump and his team have done here is a policy gamble carried out to impress the middle-income population of the US though a growing number of American middle class now work in the services sector. It is an effort to make them believe that manufacturing jobs are returning to the US. Whether it will return or not is a different question though. The team also acknowledges that a strong manufacturing sector is highly essential to maintain the US military dominance, which is now being challenged by the Chinese might.”

“I think there are also some game theorists in Trump’s team, who believe in ‘escalation dominance’, which is a nation’s ability to control the escalation of a conflict, ensuring it can escalate or de-escalate the situation to its advantage. The concept is widely applied in geo-political and economic aspects. However, we have to wait until we find who will emerge as the winner of ‘escalation dominance’.”

Effect on Cambodia

What will be the effect on the Kingdom if these higher rates of tariffs are imposed? If implemented in full measures, it will have a direct impact on Cambodia’s GDP, reducing it by $1.5 billion in the very first year, according to reliable sources attached to the Royal Government of Cambodia.

“There is a high risk for factory closures and factory relocations within the textiles, apparel, footwear and travel goods sector, leading to huge job losses. Altogether, it will reduce the country’s domestic consumption while citizens engage in extra spending on foreign goods.

“Also hit by tariffs, Vietnam will definitely face a slowdown, adversely affecting the exports of raw materials from Cambodia. There will be a substantial decrease in Foreign Direct Investments (FDI) with investors delaying projects due to uncertainty.

“A conservative prediction puts the decline in GDP between 0.3 percent and 6 percent. US tariffs will disrupt Cambodia’s preferential trade advantages.”

The sources also revealed that the Royal Government has been advised by experts and industry specialists to suspend taxes for factories to retain operations and pay workers. “Call to reduce electricity charges for factories and simplifying customs procedures for US shipments are among the advices placed before the government.”

“The country also needs to embrace structural reforms with major transformation in the logistics sector. It should focus on diversification leveraging free trade agreements and upstream integration to meet rules of origin.”

The sources emphasised that the tariffs will cripple low-margin businesses as well as agriculture. “It could also lead to a rise in Non-Performing Loans (NPLs) along with high levels of unemployment due to large-scale factory closures.”

The way forward

The Royal Government will have to implement many measures to overcome the crisis, though the 90-day pause by Trump offers some relief for the country.

The Ministry of Commerce has said that a special committee has been set up under the leadership of Sun Chanthol, Deputy Prime Minister and First Vice-Chairman of the Council for the Development of Cambodia, to negotiate with the US Trade Department over possible tariff reductions.

The Kingdom will have to implement many measures including short-term tax holidays, cash injections and energy subsidies to prevent layoffs across industries. Renewable energy adoption, streamlining logistics and boosting E-Governance will have to be put on a fast lane.

Speaking to Khmer Times, Dr Jayant Menon, a visiting senior fellow at the Institute of Southeast Asian Studies (ISEAS-Yusof Ishak Institute) in Singapore, earlier said, the focus on tariff war is likely to shift from ‘Made in China’ to ‘Made by China’.

“Cambodia will have to focus on FDI emerging mostly from non-Chinese sources. President Trump is likely to continue the trend that started with the recent measures announced by President Biden, which target ownership and nationality rather than the location of firms, in determining who to penalise.”

He emphasised that the Kingdom must make economic diversification one of its top priorities. “A key constraint in Cambodia is the lack of diversification of the economy, which has not affected the rapid pace of economic growth but only its inclusiveness and sustainability.

“The early phase of economic diversification involving rural-urban migration from the agricultural sector into the industrial and services sector may be reaching its limit.”

Jayant noted that future diversification will have to come from intra-sectoral specialisation, or diversification within sectors. “This involves the shift into higher value-added products and activities within the industrial, services and agricultural sectors.

“Unlike the early phase of industrialisation, this process is unlikely to happen naturally and will require government intervention and policy reforms. There are two major constraints that need to be addressed to enable greater intra-sectoral diversification in order to broaden the composition of exports.

“Efforts are needed to ensure that export markets are diversified so that there is less heavy reliance on the US market alone.

“The EU and other regional markets can definitely absorb exports from a small country like Cambodia. But it will take time.”

Economist Darin Duch said Cambodia should focus on its inherent advantages to overcome the crisis. “Although global tariff policies changes may affect consumer sentiments, Cambodia is making sure to keep its commitments to offer an open and predictable investment climate.

“To the contrary, many companies still see in the country its strategic importance, owing both to its population of young workers, advantageous geography, and reforms to improve the ease of doing business.

“In particular, Cambodia has been stepping up efforts to diversify its economy, especially in emerging industries (electronics, agro-processing and services) in order to help mitigate the risks of short-term impacts by global trade shifts. And they are actively negotiating for trade deals, including with important partners like the United States.

“Simultaneously, investments to enhance productivity, such as in skills development, digital infrastructure, and trade facilitation, are being stepped up. All of these efforts combined should help make Cambodia more competitive and keep its exports appealing amid changing global trade landscapes.”

The economist pointed out that in the medium to long term, Cambodia’s ongoing emphasis on industrial diversification and infrastructure development should underpin and broaden investment from global partners in line with the Kingdom’s strong commitment to an open, rules-based multilateral trading system.

“Despite the US and China being Cambodia’s trading partners, Cambodia is manoeuvring sharply to deepen regional and bilateral trade agreements and secure access to the markets. This can be seen in agreements such as the Cambodia-Korea Free Trade Agreement, the countries’ entrance into the Regional Comprehensive Economic Partnership (RCEP), and continued trade dialogues with the European Union and others.

“Asean is still a pillar of Cambodia’s trade an economic policy. Cambodia should continue to pursue to promote intra-Asean trade by continuing to closely cooperate with sub-regional partners to improve supply chain integration, standard harmonisation and utilise the RCEP framework to the fullest.

“Such deeper integration in the region, this advanced level of economic cooperation, will offer diversification of markets, more developed logistics, and collective resilience to external shocks.”

Potential export markets

Doris Liew, economist and public policy specialist, believes that Asean nations including Cambodia must turn this disruption into an opportunity to balance its economic interests and geopolitical considerations.

Expressing her opinions at the Lowy Institute, an independent think tank, she said: “Expanding the market share remains the only alternative.” But, how could it be carried out?

Doris finds BRICS (an acronym for Brazil, Russia, India, China and South Africa) as the answer to this colossal question.

“Asean has already laid important groundwork in this direction. In 2024, several Asean member states, including Malaysia and Thailand, secured observer status in BRICS. At the same time, Asean countries such as Singapore, Malaysia and Indonesia have recently signed or are in the process of negotiating new trade agreements with the European Union, and the bloc as a whole has expanded economic cooperation with the Gulf Cooperation Council (GCC).

“Collectively, these developments position Asean to respond to the US tariffs not by retreating inward but by stronger engagement with non-US markets. While the United States remains one of the largest importers of Asean goods, a broader diversification strategy would gradually reduce US influence in the region, both economically and politically.”

She is also hopeful that the US can’t sustain the implementation of reciprocal tariffs, especially with countries such as Cambodia, as “it remains unclear whether American industries have the capacity to absorb the resulting production shift, particularly in low-cost manufacturing sectors such as garments from Cambodia or downstream manufacturing goods from Vietnam and Malaysia”.

Before April 2, all pundits believed that Cambodia would benefit from Trump tariffs, and now they claim that Cambodia will be the most affected. History has many a time proved that economists, even renowned ones, have most often gone wrong with their models vis-à-vis real outcomes, beginning from the ‘The Great Depression’ to the ‘Sub-Prime Crisis’ and the ‘East Asian Crisis’.

The Cambodian top leadership has already started negotiating with the Trump administration to ensure a smooth and successful discussions on tariffs. We will have to wait and watch.

The article is firstly publihed on Khmer Times

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Two broad challenges beset Cambodia 2025. One, the downturn in the real estate sector could dent the overall growth; two, this is more worrying as the Donald Trump administration takes office next month could open floodgates to inevitable trade tensions and create a cat among the pigeons situation. In hindsight, however, the Royal Government is geared to take on the global headwinds. Cambodia’s economy is set to continue its upward trajectory with a growth rate of around 6.3 percent. With strong economic fundamentals intact, the Kingdom also needs to shed, what one keen observer told Khmer Times, its excessive bureaucracy and administrative challenges for international companies to grow their businesses.

Several indicators point to a strong economic performance by Cambodia in 2024 and the business sector or rather the private sector which has contributed the most to the Kingdom’s growth story in the past several decades strongly believes that this saga is all set to continue into the New Year braving global headwinds.

Despite a downturn in the construction and real estate sector in 2024, the Royal Government recently projected the country’s economic growth to be around six percent in the current year, up from five percent in 2023, boosted by a recovery in the garment sector, a rise in non-garment manufacturing and a gradual recovery in the tourism industry.

“Cambodia’s economy is set to continue its upward trajectory,” Aun Pornmoniroth, Deputy Prime Minister and the Minister of Economy and Finance, declared in the National Assembly during a 2025 budget law debate in late November.

“For 2025, Cambodia’s economy is forecast to achieve a growth rate of around 6.3 percent, which will push up the Kingdom’s gross domestic product (GDP) to $51.39 billion,” he said.

The Deputy Prime Minister said the country’s GDP per capita was estimated to reach $2,924 in 2025. According to him, in 2025, the industrial sector, mainly garment and construction, is predicted to grow by 8.6 percent, the service sector, mainly tourism, transport, telecom, trade and real estate, is expected to increase by 5.6 percent, and agriculture by 1.1 percent.

Accommodation and other supporting sectors (tourism) are expected to continue an upward trend and move toward the pre-pandemic level, he said, meanwhile, resilient momentum in the non-garment sector will continue with newly emerging production industries, especially automotive assembly, food, and beverage productions.

The country’s inflation is forecast to be a reasonable 2.5 percent in 2025, a continuation of the trend in 2024.

Meanwhile, the World Bank recently forecast Cambodia’s economic growth at 5.3 percent in 2024, up from five percent in 2023, buoyed mainly by trade, tourism, and foreign direct investment.

The World Bank’s report said real estate and property investment remained subdued in 2024. “The downturn in the property sector continued reflecting overcapacity in the property market and a continued housing market correction,” the report said.

According to the report, during the first eight months of 2024, the approved property development project value reached $3.3 billion, marking a 29.1 percent year-on-year decline, driven by a decline in investment in residential property.

Even though domestic demand is expected to further improve in the next two years, supported by an improved job market and well-anchored inflation expectations, the recovery remains incomplete, the report said.

This is because a rebound in domestic consumption, which accounts for about two-thirds of GDP, will be dampened by subdued domestic credit growth caused by a prolonged downturn in the construction and real estate sector, it added.

In addition, the negative wealth effects of falling house prices and notably high household debt, with debt service payments close to 50 percent of income, are likely to constrain consumption.

Cambodia can further boost its growth by diversifying trade and improving productivity, said World Bank Country Manager for Cambodia, Tania Meyer.

“Investing in human capital, in particular education, and deepening reforms to improve the business environment will be key to enable the private sector to create more and better jobs,” she said.

Cambodia has traditionally relied on a few key sectors, and reducing this dependence is crucial for creating a more resilient and diversified economic foundation. By expanding into new sectors and modernizing existing ones, Cambodia can ensure that growth is more balanced and sustainable.

More reforms urged
The World Bank’s report calls for comprehensive reforms in both the financial sector and infrastructure, as well as a focus on modernization and inclusivity. By addressing these areas, Cambodia can continue to build a strong, sustainable and competitive economy for the future.

Infrastructure development plays a key role in supporting this transformation. Investing in infrastructure is not only necessary for boosting economic activity but also for enabling modernization and digitalization.

These advancements can further enhance Cambodia’s global competitiveness, positioning the country as a leader in regional economic growth.

However, Tassilo Brinzer, Chairman of European Chamber of Commerce (EuroCham) in Cambodia told Khmer Times that the reforms and initiatives launched by the new administration headed by Prime Minister Hun Manet from 2023 will firm up in the coming year.

“The government has been open to discussion and feedback and is keen on moving forward fast while trying to attract business from all parts of the world. The most pressing issue is market access for new and existing businesses, as excessive bureaucracy and administrative challenges combined with overlapping regulation making it hard for international, compliant companies to grow their business,” Brinzer pointed out.

In his view, the most relevant areas of growth and opportunity are the logistics and transport, and renewable energy sectors. “While automotive industries and supply chains seem to be growing, there is only so much the market can absorb, while exports via Cambodia will be closely monitored by importing regions (see the solar panel export issues during 2023-2024).

According to Brinzer, the garment sector has been doing well in 2024 and can grow further but might find political obstacles ahead in the coming year, particularly in Europe where the European Parliament has launched a motion to review the EBA (Everything but Arms).

“Tourism seems to grow back although we are still not on the levels of revenues the industry created in earlier days. Lower budgets and new priorities will most likely see a reduced international development aid sector, which will result in less rental incomes, school enlisting, and local revenues and salaries,” Brinzer said even as he made a call to reduce red tape in bureaucracy and closer cooperation between ministries, government agencies and the private sector.

According to Anthony Galliano, Group CEO of Cambodian Investment Management Group, most institutions predict continued growth for Cambodia in 2025 varyingly from 5.5 percent to 6.3 percent, following a 2024 projected growth on average of approximately 5.8 percent.

“The engines of the economy have been exports, reaching $21.57 billion, marking a 16 percent increase compared to the same period in 2023, besides FDIs. While there is a reported increase in international tourism arrivals so far in 2024 of about 23 percent, this does not appear to be experienced by those in the sector, particularly in Siem Reap,” Anthony said.

“The global economy grew three percent in 2024, consistent with the previous year, despite geopolitical tensions, high public debts and persistent inflation. Growth is anticipated to remain at three percent in 2025 too, the main challenges anticipated to be inflation, trade policies, and political uncertainties,” he noted.

According to Anthony, in the last month the Dow Jones Industrials in the US, the bell weather index for financial markets globally, has fallen four percent. Delays in interest rate cuts and mixed economic data are part of the reason, while ongoing tensions and uncertainties surrounding trade policies, particularly between major economies, have added to market volatility, prompting investors to adopt a more cautious approach.

“I expect a paradigm shift in global economic and trade, commencing in 2025, as the Donald Trump administration is to take office. Tariffs are anticipated on major trading partners, particularly China. This will likely result in continued higher inflation, acceleration of shifts in the supply chain, trade tensions, and financial market volatility. There will also be a period of disruptive policies with the largest economy in the world seeking to reverse unfavourable trade arrangements. For Cambodia, this may impact the exports that have underpinned the economy in recent years,” Anthony pointed out.

Real estate sector
Tom O’Sullivan, Chief Executive Officer of realestate.com.kh, told Khmer Times that 2025 in all likelihood will be a good year for real estate buyers. “A significant surge in resale properties is expected throughout 2025, likely marking the true market bottom we’ve anticipated over the past 24 months, which represents a good opportunity for buyers,” he said.

“I suspect that landed property prices will continue to decline before stabilizing later in the year. The condo market is likely to grow steadily, with limited new launches. Developers focus on central locations and prioritize projects in the affordable to mid-range sector. There will be continued value for buyers in this sector,” Tom noted.

According to him, in Phnom Penh, BKK1 rents will be interesting to observe with over 1,000 new units entering the market following the completion of Le Conde and Time Square 306.

“The Koh Pich/ Norea City area will continue to develop, providing value to people moving into Diamond Bay Garden after units are gradually handed over later in 2025.

There will also be continued green shoots of growth in Sihanoukville. The government has already resolved over 100 unfinished building cases and continues accelerating,” he added.

Key sectors
According to Tan Khee Meng, President of the Malaysian Business Chamber of Cambodia (MBCC), it is evident that Cambodia’s core economic fundamentals, namely tourism, agriculture, construction, and manufacturing, have shown signs of recovery in 2024 since the challenges faced during the COVID-19 pandemic.

“Under the leadership of Prime Minister Hun Manet, who took office in 2023, notable reforms have taken place. The forward-looking strategies and policies have created tremendous positive effects, and it is anticipated that industrialization, agro-processing, ICT, and renewable energy will receive significant foreign direct investment (FDI) in 2025 and beyond,” Meng said in an optimistic note.

In his view, Cambodia’s strategic location and open FDI policies make it an ideal destination for factories and manufacturers seeking to relocate from China to Southeast Asia.

“The ongoing geopolitical tensions between the US and China have led to a shift in global supply chains, presenting opportunities for countries like Cambodia to attract more FDI. In 2024, Cambodia’s total FDI inflows increased compared to the previous year. This growth is expected to continue in 2025,” he said.

According to Meng, the Regional Comprehensive Economic Partnership (RCEP) has provided Cambodia with access to a market of 2.2 billion people, representing about 30 percent of the world’s population. This presents immense potential for Cambodian businesses to expand their reach.

The MBCC President said that the private sector in Cambodia remains confident in the country’s continued economic development in 2025 and beyond. “With the right policies and investments in place, Cambodia is poised to become a more prominent player in the region, leveraging its strategic location, young population, and growing economy to attract more FDI and foster sustainable growth,” he said.

Socio-economic researcher Chey Tech said that Cambodia is expected to push the country’s GDP to about $51.5 billion, which is almost $2,500 per capita income. “The macroeconomic growth in 2025 mainly relies on key sectors such as industry, services, and agriculture,” he noted while acknowledging challenges such as geopolitical tensions, trade wars and supply chain disruptions.

Thong Mengdavid, Geopolitical Analyst and Lecturer at the Institute for International Studies and Public Policy (IISPP) at the Royal University of Phnom Penh (RUPP), is confident that Cambodia’s economy will maintain its positive momentum in 2025, fuelled by its dynamic young workforce, a growing manufacturing sector, and deeper integration into regional trade frameworks like ASEAN.

“A key priority will be diversifying the economy, with a focus on technology, green energy, and digital innovation to lessen dependence on traditional industries such as garment exports. Major infrastructure projects like the Funan Techo Canal are expected to boost connectivity and attract further investments,” Mengdavid noted.

“Moreover, advancing education and skill development will be critical for Cambodia to harness its demographic strengths and achieve sustainable, long-term growth toward its high-income goals,” he said.

Vichet Lor, Vice President of the Cambodia Chinese Commerce Association (CCCA), said that the Royal Government’s open trade policy, continuing reforms of its tax regime along with the frequent interactions with the private sector have helped to address key issues and challenges in a timely manner and boosted international trade to new heights.

“The aspiration of Cambodia to elevate itself on the regional supply and value chains has been demonstrated by its huge investment to upgrade its public infrastructure like airports, seaports and expressways to enhance competitiveness on the logistics front and regional connectivity,” Vichet noted.

He, however, added that as Cambodia has embarked on a journey to becoming a high-income country by 2050, imminent challenges remain like accelerating governance and judicial reforms to ensure an open, fair and transparent investment climate.

This article is firstly published on Khmer Times

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