Economic Overview
Cambodia has enjoyed steady economic growth between 1995 and 2019, with GDP growth averaging nearly 7.6%. Nevertheless, the country’s economy experienced an unprecedented contraction in 2020. Cambodia is rebounding from the pandemic, experiencing a GDP growth of 5.2% in 2022. Driving this recovery is the manufacturing sector, contributing more than 3% to the real GDP. Although agriculture encountered difficulties due to weather and increasing costs, the service sector demonstrated a robust resurgence. According to the latest IMF estimates, the economy expanded by 5.3% in 2023, driven by a revival in tourism and robust performance in non-garment exports. Garment exports have experienced a decline, with only modest signs of recovery observed in the third quarter. The output gap is expected to gradually narrow, approaching a level below the pre-crisis trend of potential output and turning positive by 2025. Medium-term growth is projected at around 6.3%, albeit with significant uncertainty, contingent upon the implementation of anticipated reforms.
In 2023, the fiscal deficit widened to approximately -3.6% of GDP before decreasing to about 2% in 2024 and stabilizing at 2.5% over the medium term (IMF). The uptick in the deficit in 2023 primarily stemmed from increased spending requirements related to the 2023 Southeast Asia Games, the General Election, a scheduled public sector wage hike, and the completion of ongoing infrastructure projects from 2022. The revenue-to-GDP ratio is anticipated to see a modest rise over the medium term, bolstered by reforms in tax and customs administrations. According to the IMF analysis of debt sustainability, under the baseline scenario, the total public and publicly guaranteed (PPG) debt-to-GDP ratio, which stood at 35% of GDP by the end of 2022, is forecasted to increase by approximately 4 percentage points of GDP over the next decade due to elevated financing costs associated with the fiscal deficit. In 2023, inflation was projected to average 2.3%, gradually converging to its long-term trend of approximately 3% by 2024, provided there were no additional shocks in commodity prices. Agriculture represents 22.2% of GDP (World Bank, latest data available) and includes rice, rubber, corn, vegetables, cashews, cassava (manioc, tapioca), tobacco, and silk. However, the primary sector is vulnerable to climatic events, and production remains largely insufficient. Industry represents an additional 37.9% of GDP, which includes garments, construction, rice milling, fishing, wood and wood products, cement, gem mining, and other textiles. Services account for almost 34%, with the tourism sector holding a pivotal role.
Since 2010, there has been a notable shift in employment composition, moving away from agriculture towards manufacturing. The share of employment in agriculture has decreased from 55% to less than 40%, while the industrial sector's share has increased from 16% to 25% over the same period. Additionally, the expansion of national income has led to growth in the non-tradable sector, with the contribution of construction to GDP rising from 4.9% to over 10% between 2012 and 2022. Moreover, there has been a significant reduction in the poverty rate, declining from 36.7% in 2014 to 16.6% in 2022. Cambodia’s unemployment rate declined to 0.3% in 2023 from 0.4% one year earlier, according to figures released by the labor ministry. Inequalities are also evident: while the GDP per capita in Cambodia was last recorded at USD 5,355 in 2022 - when adjusted by purchasing power parity (PPP) - or equivalent to around one-fourth of the world's average, two-thirds of the households in Cambodia experience seasonal food shortages, especially in rural areas, and 32% of children under five are stunted (World Bank).
| Main Indicators | 2022 | 2023 (E) | 2024 (E) | 2025 (E) | 2026 (E) |
| GDP (billions USD) | 39.06 | 41.86 | 45.15 | 48.73 | 52.61 |
| GDP (Constant Prices, Annual % Change) | 5.1 | 5.0 | 6.0 | 6.1 | 6.1 |
| GDP per Capita (USD) | 2,319 | 2,460 | 2,628 | 2,808 | 3,002 |
| General Government Gross Debt (in % of GDP) | 25.7 | 25.9 | 26.4 | 26.2 | 25.5 |
| Inflation Rate (%) | 5.3 | 2.1 | 2.3 | 3.0 | 3.0 |
| Current Account (billions USD) | -7.49 | 0.55 | -1.56 | -2.01 | -2.22 |
| Current Account (in % of GDP) | -19.2 | 1.3 | -3.5 | -4.1 | -4.2 |
Source: IMF – World Economic Outlook Database , October 2021
Country Risk
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