ADB Projects Cambodia’s Economy to Grow by 4.5% in 2026 Under an Early Middle East Stabilisation Scenario
Cambodia’s economy is projected to expand by 4.5 per cent in 2026 if global commodity market disruptions are not prolonged by the conflict in the Middle East, according to the latest edition of the Asian Development Bank’s (ADB) flagship economic report published on April 10, 2026.
Under ADB’s early stabilisation scenario, growth is supported by resilient manufacturing performance. It is projected to strengthen further to 5.0 per cent in 2027 as external conditions improve and domestic reforms continue to enhance economic productivity.
“Cambodia continues to show resilience in the face of external pressures,” said Yasmin Siddiqi, ADB Country Director for Cambodia. “Manufacturing remains solid, and ongoing government efforts to bolster the tourism sector will help maintain economic momentum despite global challenges. Developing a productive workforce is essential for attracting diversified, high-quality investment, while public–private collaboration in skills development is crucial to achieving Cambodia’s long-term growth objectives.”
The Asian Development Outlook (ADO) April 2026 projects that manufacturing will remain the economy’s primary growth engine in 2026, with industrial output expected to grow by 7.3 per cent. This is driven by strong garment orders and expanding contributions from non-garment manufacturing – including electrical components, tires, and furniture. Modest growth in the agriculture sector is expected to continue at 0.9 per cent, supported by export demand for rice and cashew nuts. Government initiatives that promote sustainable production and reintegrate returning migrant workers into the sector will help reinforce these gains.
Services sector growth is projected to slow from 3.4 per cent in 2025, to 2.3 per cent in 2026, as the economy adjusts to the effects of the Thailand border closure. Foreign direct investment (FDI) remained strong in 2025, with approved fixed asset investment rising by 45 per cent, reflecting investor confidence and continued diversification into higher value production.
Inflation is forecast to edge up to 2.8 per cent in 2026, assuming global commodity price increases due to the Middle East conflict are not sustained. A protracted fuel price shock could raise imported input costs and adversely affect agriculture, manufacturing, and tourism. The fiscal deficit is projected to widen further in 2026 as spending rises – including support for vulnerable households – while revenue growth weakens in line with economic growth.
Achieving Cambodia’s goal of becoming a high-income economy by 2050 will require sustained productivity gains, supported by investments in human capital. Skills gaps remain a critical constraint, with employers consistently reporting challenges in finding qualified workers.
Government reforms – such as enabling private-sector participation in public training institutions – are helping align training with market needs and strengthen the workforce.
ADB is a leading multilateral development bank supporting sustainable, inclusive, and resilient growth across Asia and the Pacific. Working with its members and partners to solve complex challenges together, ADB harnesses innovative financial tools and strategic partnerships to transform lives, build quality infrastructure, and safeguard our planet. Founded in 1966, ADB is owned by 69 members – 50 from the region.
This press release was supplied.
