PHNOM PENH, July 27 (Xinhua) -- Cambodia's economic growth is projected to decelerate to 4.2 percent in 2026, down from 5.3 percent the previous year, according to the latest report released by the ASEAN+3 Macroeconomic Research Office (AMRO) on Monday.
However, the Southeast Asian country's economic growth is forecast to rebound to 4.9 percent in 2027.
Driven by rising global oil prices, consumer inflation is expected to spike to 5.1 percent this year, up from 2.5 percent last year, before easing back to 2.8 percent in 2027, the report said.
AMRO highlighted key downside risks, noting that a renewed escalation of conflict in the Middle East could drive up energy, shipping, and food costs.
It added that policymakers must respond flexibly to differing domestic conditions and rapidly evolving external risks, particularly the AI cycle and the Middle East conflict.
Thong Mengdavid, deputy director of the China-ASEAN Studies Center at the Cambodia University of Technology and Science, said Cambodia's economy remains resilient, yet the country faces both external and domestic challenges, such as the Middle East conflict and the Cambodia-Thailand border dispute.
These problems cause energy prices to fluctuate and affect border trade and investor confidence, he told Xinhua.
To tackle these issues, the government should focus on strengthening domestic demand, improving the investment climate, and deepening regional economic integration to reduce external volatility and strengthen regional resilience.
At the same time, the government should intensify efforts to combat online scams and ensure border stability through peaceful dialogue, Mengdavid said.
Cambodia should take advantage of AI to improve industrial competitiveness, public services, logistics, and workforce skills, enabling higher-value economic growth and greater resilience, he added. ■
