Cambodia’s Growth Outlook Remains Strong Despite Global Uncertainty
Cambodia’s economy is expected to continue growing at a solid pace and stay broadly in line with regional peers while outperforming the global average, according to the World Bank’s latest Global Economic Prospects report. The World Bank forecasts Cambodia’s GDP growth at 4.3 percent in 2026, rising further to 5.1 percent in 2027. This trajectory places the country close to the East Asia and Pacific regional average, projected at 4.4 percent in 2026 and 4.3 percent in 2027, and well above the global growth outlook of 2.6 percent in 2026 and 2.7 percent in 2027. Despite ongoing global challenges such as trade tensions, high debt burdens, and policy uncertainty, Cambodia continues to rank among the faster growing economies worldwide, supported by resilient domestic demand, improving investment conditions, and a gradual normalization of trade following recent volatility.
Regional Trends Provide a Supportive Backdrop
Across East Asia and the Pacific, economic growth is expected to slow slightly in 2026 as the effects of earlier export front loading fade and global demand softens. China’s economic slowdown is a major factor pulling down the regional average, while growth in the rest of the region is projected to remain relatively resilient thanks to domestic policy support and steady investment. Cambodia’s outlook closely reflects this regional pattern. After an estimated expansion of 4.8 percent in 2025, growth is forecast to ease modestly in 2026 before strengthening again in 2027 as trade conditions stabilize and investment activity gains momentum. Even with this temporary moderation, Cambodia’s growth rate in 2026 is projected to be nearly double the global average, highlighting its relative strength in a challenging external environment. Read More: World Bank Warns Cambodia’s 0.8% Productivity Growth Is Less Than Half of What Vision 2050 Requires, With 41% of Informal Firms in Survival Mode
Global Economy Shows Stability Without Strong Momentum
At the global level, the World Bank expects economic growth to remain stable but subdued. An improved outlook for the United States led to a modest upward revision for 2026, helping to offset weaker momentum in other major economies. Growth in 2025 was temporarily boosted by a surge in trade activity as companies adjusted supply chains and accelerated exports ahead of possible policy changes. These short term supports are expected to fade in 2026, but easing financial conditions, lower inflation, and fiscal expansion in several large economies should help cushion the slowdown. Global inflation is projected to ease to 2.6 percent in 2026, which is expected to support household purchasing power and encourage investment. Despite this relative resilience, the World Bank cautioned that the current decade is on track to be the weakest period for global growth since the 1960s, driven by slower productivity gains and record levels of public and private debt.
Jobs, Investment, and Fiscal Discipline Are Key to Sustained Growth
The World Bank emphasized that maintaining growth across developing economies, including Cambodia, will depend heavily on job creation and productivity improvements. Over the next decade, around 1.2 billion young people are expected to enter the workforce in developing countries, significantly increasing pressure on labor markets and underscoring the need for private sector expansion and investment. Fiscal sustainability was also highlighted as a growing concern, with public debt in emerging and developing economies now at its highest level in more than 50 years. This makes credible fiscal management and investment friendly policies increasingly important. For Cambodia, the World Bank’s projections point to a relatively positive medium term outlook. Growth remains strong by global standards and broadly aligned with regional peers, but continued reforms to boost productivity, attract private capital, and strengthen the business environment will be essential to sustain momentum as global economic tailwinds gradually weaken.
Conclusion
Overall, Cambodia’s economic outlook for 2026 and beyond reflects resilience and steady progress in a complex global environment. While external risks remain and regional growth is expected to moderate in the near term, Cambodia is well positioned to maintain above average growth if it continues to focus on productivity, job creation, and sound fiscal management. With the right policy mix and sustained reform efforts, the country can build on its current momentum and support more inclusive and durable economic growth in the years ahead.