The Cambodian government has lowered its economic growth forecast for 2026 to 4.2 percent, down from the 5 percent projection outlined in the country’s 2026 Budget Management Law.
According to a new mid-term fiscal and economic assessment reported by local media outlet The Cambodia China Times, the downgrade was attributed to rising global energy prices, border tensions with Thailand and the ongoing crackdown on scam operations.
The government also revised down its 2027 growth forecast to 5 percent from the previous estimate of 5.5 percent.
According to the report, the crackdown on telecom and cyber fraud activities — an issue that has drawn increasing regional and international scrutiny in recent years — is expected to improve Cambodia’s investment environment and international image over the long term. However, authorities said the campaign has created short-term pressure on sectors including construction, real estate and domestic consumption.
The assessment also highlighted the impact of continued conflict in the Middle East, which has pushed up international oil and natural gas prices, increasing inflationary pressure and affecting key sectors such as tourism, transportation, agriculture, and wholesale and retail trade.
Separately, tensions along the Cambodia-Thailand border were said to have disrupted tourism flows, agricultural exports and cross-border remittances.
The government said Cambodia’s tourism sector is expected to continue its gradual recovery, although international visitor confidence has been affected by the border situation, anti-scam enforcement measures and geopolitical tensions. Domestic tourism demand is expected to provide some support for the sector.
Despite the downgrade, the government said export-oriented industries and services are still expected to maintain relatively stable growth, provided there are no major changes in global trade tariffs or a significant deterioration in external demand.
Cambodia also said it would maintain a ‘neutral fiscal stance’ to preserve public finance sustainability while continuing efforts to expand the tax base, restore fuel product tax rates and strengthen anti-scam enforcement to improve investor confidence.
Several international institutions have also lowered Cambodia’s 2026 growth forecasts, with the International Monetary Fund projecting 4 percent growth, the World Bank forecasting 3.9 percent and the ASEAN+3 Macroeconomic Research Office (AMRO) estimating 4.9 percent.
