IMF Lowers Cambodia 2026 Growth Forecast to 3 Percent

The International Monetary Fund lowered Cambodia's economic growth forecast for 2026 to 3 percent, down from previous projections of 4 percent and a 2025 rate of 5.3 percent. The institution expects a recovery in 2027, but warns that growth is currently hindered by higher energy prices, softer external demand, and reputational damage linked to online scam activities that have weakened tourism.

Inflation is projected to more than double, rising from a 2025 average of 2.5 percent to 5.6 percent in 2026. While foreign direct investment and international reserves remain adequate, the IMF identified a weakening external position marked by a current account deficit and declining remittances. Internal vulnerabilities include real estate weakness and asset-quality deterioration within the financial sector.

To counter these trends, the IMF recommended that the government implement structural reforms to enhance governance and the rule of law, improve tax compliance, and provide targeted fiscal support for vulnerable households. These measures are intended to support Cambodia as it prepares to graduate from Least Developed Country status.