Phnom Penh, Nov 26 (IANS) Cambodia’s economic growth is projected to decelerate to 4.8 per cent in 2025 and 4 per cent in 2026, reflecting export volatility, declining remittances, a slowdown in tourism, and weak domestic demand, the International Monetary Fund (IMF) said on Wednesday.
Cambodia’s growth reached 6 per cent in 2024, but a confluence of shocks — trade disruptions, border tensions, and anaemic credit growth — exposed the economy’s vulnerabilities, and signs of economic slowdown are emerging in the second half of 2025, said an IMF press release.
“The downward revision reflects remittance losses and a tourism slowdown, which are expected to weigh on domestic demand,” the press release said. “Tariff effects will lower export earnings as manufacturers face margin pressures.”
On August 1, the United States imposed a 19 per cent tariff on all goods imported from Cambodia, reports Xinhua news agency.
Prudent fiscal and monetary policies, together with structural reforms, are essential to safeguard stability and strengthen resilience, the press release said, adding that near-term measures should cushion external shocks while laying the foundation for medium-term competitiveness.
According to the press release, Cambodia’s inflation is projected to rise modestly in 2025 before easing in 2026.
Earlier on Monday, the Asian Development Bank (ADB) approved a policy-based loan of 50 million US dollars to strengthen Cambodia’s financial sector and digital infrastructure.
Through a dedicated program, the investment will support both banking and nonbanking institutions, as well as digital finance infrastructure and sustainable finance capabilities, according to an ADB press release.
“Through this investment, ADB supports the country in boosting its financial sector, laying the foundation for resilient growth, expanding financial inclusion, and unlocking private sector potential,” said Anthony Gill, ADB acting country director for Cambodia.
While Cambodia’s financial sector has achieved notable progress, further development is required to fully unlock its potential, the release noted.
The approved first phase of the investment program focuses on boosting the regulatory environment, financial stability, market depth, and consumer protection, as well as developing strategic plans for financial technology, regulatory frameworks for digital assets and cryptocurrencies, and peer-to-peer financing, the press release said.
–IANS
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