AMRO projects Cambodia to grow by 5.8% in 2025
AMRO projects Cambodia to grow by 5.8% in 2025
Cambodia’s economy will continue its gradual recovery with projected growth of 5.8 percent in 2025, according to the latest quarterly update report of The ASEAN+3 Macroeconomic Research Office (AMRO) released yesterday.
Interestingly, the report stated that despite its gradual recovery Cambodia is still among the top five countries in the ASEAN region with the fastest economic growth in 2025.
Vietnam is at the top with a growth rate of 6.5 percent, followed by the Philippines at 6.3 percent, Cambodia at 5.8 percent, Indonesia at 5.1 percent, and Malaysia at 4.7 percent, the report added.
The other five countries in the region are projected to grow are Lao PDR at 4.6 percent, Thailand at 3.1 percent, Brunei Darussalam at 3.0 percent, Singapore at 2.7 percent, and Myanmar at 1.0 percent.
Cambodia’s growth in the garment sector is expected to rebound steadily in 2025, driven by stronger demand for consumer goods in major advanced markets, the AMRO report said.
Similarly, the non-garment sector is forecast to sustain its strong growth momentum, supported by stable foreign direct investment (FDI) inflows.
A robust recovery in tourism, fueled by increased flight availability, the continued return of foreign tourists—particularly from China—and pent-up domestic consumption, will further strengthen the ongoing improvement in the service sectors.
However, the construction sector may face a slower recovery, with growth potentially falling short of pre-pandemic levels due to a prolonged downturn in real estate.
Meanwhile, increased infrastructure investment, supported by the government’s comprehensive master plan for transportation and logistics, will partially offset the weaknesses in the real estate sector.
Talking to Khmer Times, economist Duch Darin expressed optimism about Cambodia’s future. He noted that, after enduring civil war, Cambodia has enjoyed 27 years of peace and since 1979, the country has been rebuilt, achieving an average annual economic growth rate of approximately 7 percent.
Darin also highlighted significant improvements in human capital and advancements in the healthcare system.
He also emphasized the importance of continuing efforts to enhance Cambodia’s economic infrastructure.
“We need to invest in developing our human capital and labour force to equip them for higher-tech industries,” he said, envisioning opportunities in sectors such as advanced electronics and processed goods.
“Additionally, we should continue improving our infrastructure—building more roads, bridges, and port facilities.
“Keeping energy prices reasonable will help reduce logistics costs and streamline business operations, contributing to Cambodia’s long-term success,” he added.
The World Bank’s latest Global Economic Prospects report forecasts Cambodia’s GDP growth at 5.5 percent for this year and next—up from an estimated 5.3 percent last year.
Released in Washington last Thursday, the annual report ranks Cambodia among the fastest-growing emerging markets and developing economies in East Asia, ahead of China, Indonesia, Malaysia, Laos, Thailand, and Myanmar.
However, Cambodia’s growth forecasts lag behind those of Mongolia (6.5 percent this year and 6.1 percent next year), Vietnam (6.6 percent and 6.1 percent), and the Philippines (6.1 percent and 6.0 percent).
China is projected to grow by 4.5 percent this year and 4.0 percent next year.
Elsewhere in East Asia, growth forecasts include 5.1 percent for Indonesia in both years, 4.5 percent and 4.3 percent for Malaysia, 3.7 percent for Laos in both years, and 2.9 percent and 2.7 percent for Thailand.
However, in its Budget in Brief report for the Fiscal Year 2025, the Ministry of Economy and Finance (MEF) projects that Cambodia’s economy will grow by 6.3 percent in 2025, exceeding AMRO’s and World Bank’s forecast.
According to the Royal Government’s assessment of the medium-term public financial framework, this growth is expected to raise the current price of Gross Domestic Product (GDP) to approximately 209,163 billion riels, equivalent to around $51.39 billion. Meanwhile, GDP per capita is anticipated to reach $2,924. The forecast indicates that Cambodia’s economic growth in 2025 will be driven by sectors such as industry, services, and agriculture.
