MGR Online — Cambodia's Ministry of Economy and Finance has revised down its economic growth forecast for 2026 to 4.1%, from the 5% target set in the budget law, citing weaker performance in the agriculture and tourism sectors due to a range of external and domestic factors.
The revised forecast is included in the ministry's mid-year budget report, which notes that the previous 5% projection was drawn up before Cambodia was hit by disruptions from its border dispute with Thailand and from the conflict in the Middle East, which has driven up global fuel prices.
The Ministry of Economy stated that it had already lowered the forecast to 4.2% in its medium-term fiscal plan, but reduced the figure further after consultations with ministries, institutions, and the private sector.
The agricultural sector is expected to expand by only 0.3% this year, with crop output growing just 0.1%, officials said, adding that falling global commodity prices, rising production costs, and border tensions have all weighed on output and exports.
Tourism was cited in the report as another significant drag, with the services sector forecast to grow by 2.1%, while the accommodation and food services sub-sector is projected to contract by 3.5%.
Cambodia received approximately 1.5 million international tourists in the first five months of 2026. The report attributed the decline in visitor numbers to concerns over scam centres, higher airfare costs, and border tensions.
The garment manufacturing sector slowed slightly due to weaker demand from Europe, but non-garment manufacturing remained strong, with industrial sector growth forecast at 6.9% and non-garment manufacturing expected to expand by 10.3%, supported by robust exports of electronic components, automotive parts, furniture, and tyres.
Non-garment exports rose by nearly 38% in the first half of the year, the ministry said, adding that orders for the second half are expected to remain relatively strong. The report noted that the diversification of the manufacturing sector is helping to cushion the economy from the broader impact of weakness in tourism and agriculture.
The ministry warned that global tensions, rising energy costs, inflationary pressures, and supply chain disruptions continue to create uncertainty for investment and trade, making the latest forecast of 4.1% a significant downward revision.
The report stated that the latest projections reflect uneven performance across Cambodia's economy, with the tourism, agriculture, and some traditional sectors facing pressure, while the diversification of manufacturing and non-garment exports is serving as a buffer against wider economic fallout.
