The Asian Development Bank (ADB) has lowered its 2026 economic growth forecast for Cambodia to 3.9%, down from 4.1% in July, citing weaker tourism and slower growth in related services.
The ADB retained its 2027 growth forecast at 4.7% in the September edition of its Asian Development Outlook.
Tourism Decline Weighs on Growth
International visitor arrivals to Cambodia fell 47.9% year-on-year to 1.8 million during the first half of 2026, reaching just 52.5% of pre-pandemic levels.
The ADB attributed the decline to several factors, including the conflict in the Middle East, the closure of the Cambodia-Thailand land border and concerns surrounding the transnational scam industry.
Lower visitor numbers have affected transport, hospitality, trade and retail activity, leading the ADB to reduce its outlook for the services sector.
Manufacturing Supports the Economy
Manufacturing remains a key contributor to Cambodia’s economic growth despite weaker tourism.
Exports of manufactured goods excluding garments increased 38.4% during the first half of 2026. Meanwhile, construction and real estate activity remained subdued.
The divergence between manufacturing and tourism highlights the uneven performance of Cambodia’s economy, with export-oriented industries providing support as service-sector activity slows.
Inflation Forecast Raised
The ADB also raised its 2026 inflation forecast for Cambodia to 4.7%, citing higher global oil prices and increased imported costs.
Inflation is expected to moderate to 2.8% in 2027 as price pressures ease.
Geopolitical Risks Remain
The ADB warned that prolonged geopolitical tensions, higher commodity prices and continued weakness in tourism could put additional pressure on Cambodia’s economic growth.
For businesses operating in tourism-related sectors, the continued decline in international arrivals remains a key concern, while manufacturing exports provide an important source of economic support.
