PHNOM PENH, Dec. 3 (Xinhua) -- Cambodia's economy was forecast to achieve a 5.2 percent growth in 2025, down from its earlier projection of 6.3 percent, due to U.S. tariff imposition and border tensions, the country's Minister of Economy and Finance Aun Pornmoniroth has said.
The economic growth is expected to be slower at 5 percent in 2026, he told the parliament last Friday during the debate and passage of the Budget Law for 2026.
"This slight slowdown was due to the impacts of the implementation of U.S. reciprocal tariffs on Cambodia's exports and the prolonged closure of the Cambodia-Thailand land border," he said.
"However, overall, Cambodia still maintains a good growth momentum, supported by export-oriented sectors, coupled with the continued good trend of domestic consumption and the trend of supporting and using domestic products," he added.
On Aug. 1, the United States imposed a 19 percent tariff on all goods imported from Cambodia.
Pornmoniroth, who is also a deputy prime minister, said Cambodia's gross domestic product (GDP) was expected to reach 53.8 billion U.S. dollars in 2026, as the country's GDP per capita was estimated to rise to 3,020 dollars next year.
He added that inflation was forecast to remain at 2.8 percent in 2026 due to expected stability in international commodity prices, especially fuel prices, and the anticipated positive trend of domestic consumption and spending.
The Southeast Asian nation's economy mainly relies on garment, footwear, and travel goods exports, tourism, agriculture, and real estate and construction.
Kin Phea, director general of the International Relations Institute of Cambodia, a think tank under the Royal Academy of Cambodia, said that in response to the slowdown caused by U.S. tariffs and border tensions, Cambodia must diversify its markets, broaden its industrial base, and reduce overdependence on any single partner or industry.
"Leveraging the Regional Comprehensive Economic Partnership (RCEP) and the Cambodia-China Free Trade Agreement (CCFTA) is essential," he told Xinhua on Wednesday. "The RCEP offers wider regional market access, lower tariffs, and smoother customs procedures, helping sustain exports in garments, agriculture, and light manufacturing."
"The CCFTA, meanwhile, provides preferential access to China's vast market, especially for agro-processing and high-value agricultural products," he added.
Phea said that to keep growth momentum, Cambodia should prioritize strategic sectors such as agri-tech, renewable energy, logistics, digital services, and value-added manufacturing.
"At the same time, strengthening food and energy security, enhancing domestic supply-chain resilience, and investing heavily in human capital -- skills, innovation, and research -- will build long-term competitiveness and cushion future external shocks," he said.
Thong Mengdavid, a lecturer at the Institute for International Studies and Public Policy of the Royal University of Phnom Penh, said on Wednesday that Cambodia's growth slowdown underscores the need to rely more on regional trade frameworks.
"Diversifying export markets toward ASEAN, East Asia, the Middle East, and Eurasia would reduce dependence on the United States and the European Union while strengthening integration into regional supply chains, attracting foreign direct investment, and supporting a shift to higher-value production," he told Xinhua.
"With broader regional market access and lower trade barriers under the RCEP and the CCFTA, Cambodia can also expand investment beyond garments into sectors such as electronics, agro-processing, and green technologies," he added.
Mengdavid said to fully leverage these gains, Cambodia should continue improving tax administration, infrastructure, human capital, and the business environment to ensure that trade agreements translate into long-term and more resilient growth. ■
