Cambodia is set to graduate from the United Nations' Least Developed Country (LDC) status in 2029, marking a major milestone in its socio-economic journey. While this transition reflects significant progress, it also poses challenges such as losing preferential trade agreements and concessional financing. Experts emphasize the need for economic diversification, market expansion, and resilient development strategies to maintain growth without LDC-specific international support. The government has requested a five-year preparatory period, endorsed by the UN, to ensure a smooth shift.

Key sectors, including garments, rice, and bicycles, are expected to face rising export tariffs in markets like the European Union and Canada, potentially impacting GDP growth and employment. Dynamic Global Trade Analysis Project estimates suggest a 2.4 percent dip in exports and a loss of 168,000 jobs, primarily affecting female workers. UNDP recommends strengthening competitiveness, diversifying exports, and investing in green development to mitigate these impacts. Social protections and support for micro, small, and medium enterprises will also play a vital role in this transition.

Cambodia’s economy is projected to grow by 6.3 percent in 2025, with GDP per capita expected to reach 2,924 United States Dollars. Government officials stress ongoing reforms, including improvements to the business environment, infrastructure, and workforce development, to ensure resilience in a changing global landscape. Experts also highlight the importance of maintaining trade preferences, addressing socio-economic challenges such as rising debt and limited wages, and empowering businesses to adapt to evolving market dynamics for sustainable growth.

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