The Asian Development Bank (ADB) has revised Cambodia's 2026 economic growth forecast down from 4.1% to 3.9%, citing a slump in tourism and weak domestic services. Data shows international arrivals reached only about 1.8 million in the first half of the year, down 47.9% year-on-year. ADB attributed the drop to Middle East conflicts, Cambodia-Thailand land border closures, and lingering public concerns over cross-border online scam operations, hitting airlines, hospitality, retail, and local jobs.
Export manufacturing remains the main economic pillar. Garment shipments grew 6.3% to $8 billion in the first half, alongside strong gains in auto parts and electrical components heading to the US and Europe. Economists note that while industrial exports maintain headline GDP around 4%, the domestic retail and service sectors remain subdued amid rising living costs, with inflation projected at 4.7% as authorities roll out fuel subsidies and tax breaks.
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