Cambodia’s Economic Growth Faces Uncertainty Amid U.S. Trade Risks
Potential Tariffs and Slowing Global Demand Could Hinder Recovery
Cambodia’s economic growth is projected to rise from an estimated 5.7 percent in 2024 to 5.9 percent in 2025, according to a report by BMI, a Fitch Solutions Company. However, this forecast has been revised downward due to multiple risks, including a potential slowdown in the U.S. economy and concerns over new trade barriers under a second Trump administration. Given Cambodia’s heavy reliance on exports, any shift toward U.S. protectionism—especially through tariffs on manufactured goods—could significantly affect key industries like garments, travel goods, and footwear. The report notes that Cambodia is among the most vulnerable economies to such trade restrictions, alongside Mexico and Vietnam.
Despite these concerns, Cambodia’s garment and footwear exports have shown resilience, benefiting from disruptions in competing markets such as Bangladesh and Myanmar. This strength is reflected in fabric imports, which surged by over 30 percent in early 2025. However, experts warn that global economic headwinds could soon weaken this momentum. The tourism sector, which has rebounded from the pandemic, is also facing challenges. While visitor numbers have surpassed 2019 levels, revenue indicators such as Angkor Wat entrance fees suggest that overall spending remains subdued. A shift in traveler demographics—more arrivals from neighboring ASEAN countries rather than high-spending Chinese tourists—could further limit tourism’s economic impact.
The construction and real estate sectors continue to struggle, with property investment dropping sharply in 2024. Weak domestic demand remains a concern, although infrastructure projects, including a major canal development, may offer some support. Economist Darin Duch remains cautiously optimistic about Cambodia’s trade relationship with the U.S., noting that American businesses benefit from affordable Cambodian manufacturing. He also sees opportunities for growth in high-tech and agricultural exports. However, with global uncertainties on the rise, Cambodia’s economic trajectory in 2025 will depend on how well it navigates these external risks.
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Despite these concerns, Cambodia’s garment and footwear exports have shown resilience, benefiting from disruptions in competing markets such as Bangladesh and Myanmar. This strength is reflected in fabric imports, which surged by over 30 percent in early 2025. However, experts warn that global economic headwinds could soon weaken this momentum. The tourism sector, which has rebounded from the pandemic, is also facing challenges. While visitor numbers have surpassed 2019 levels, revenue indicators such as Angkor Wat entrance fees suggest that overall spending remains subdued. A shift in traveler demographics—more arrivals from neighboring ASEAN countries rather than high-spending Chinese tourists—could further limit tourism’s economic impact.
The construction and real estate sectors continue to struggle, with property investment dropping sharply in 2024. Weak domestic demand remains a concern, although infrastructure projects, including a major canal development, may offer some support. Economist Darin Duch remains cautiously optimistic about Cambodia’s trade relationship with the U.S., noting that American businesses benefit from affordable Cambodian manufacturing. He also sees opportunities for growth in high-tech and agricultural exports. However, with global uncertainties on the rise, Cambodia’s economic trajectory in 2025 will depend on how well it navigates these external risks.
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