Cambodia’s Economic Outlook: Growth, Trade, and Challenges in 2026
Cambodia’s economic growth is projected to continue, albeit at a moderating pace. While the nation anticipates economic expansion in 2026, forecasts vary, with the government projecting around 5% growth and the International Monetary Fund (IMF) offering a more cautious outlook.
Growth Projections and Recent Performance
The Cambodian economy demonstrated robust post-pandemic recovery, with 6.0% GDP growth in 2024 1. However, growth is expected to slow to 4.8% in 2025 and around 4.0% in 2026 1. The government’s 2026 national budget is based on a slightly more optimistic assumption of 5% growth 3, citing strong performance in the industry, services, and agriculture sectors.
The Role of Foreign Trade
Foreign trade is a key driver of Cambodia’s economic activity. In January 2026, Cambodian exports increased by 19%, following a 14.7% increase for the entirety of 2025.
Textile Sector Dominance
The textile sector remains the dominant component of Cambodian exports, accounting for 53% of total foreign sales. The United States is the primary destination for Cambodian products, receiving 44% of all exports.
Diversification Efforts
While textiles are central, Cambodia is making strides in diversifying its export base. Exports of rubber products increased significantly, rising by 37% in 2025 and a further 66% in January 2026 compared to the same period in the previous year. This growth is largely attributed to Chinese investments in tire production.
Emerging Electric Vehicle Sector
Cambodia is also developing an electric vehicle (EV) production sector, though current volumes are not yet substantial enough to significantly impact overall export statistics.
Challenges and Structural Issues
Despite export growth, the local added value within exports, particularly in agriculture, remains limited. The production model relies heavily on imported inputs, especially from China, contributing to a slight trade deficit despite robust export growth.
IMF Concerns and Recommendations
The IMF has cautioned about softening domestic demand, declining remittances, a slowdown in tourism, and tariff-related pressures on export margins, all of which are weighing on consumption and investment 1. The IMF also highlights financial sector vulnerabilities as a key downside risk 4. Prudent fiscal policies and targeted reforms are considered necessary to stabilize growth and address these vulnerabilities 4.
Further information on Cambodia’s economic relationship with the IMF can be found on the IMF website 1.