PHNOM PENH: The World Bank said on Thursday that Cambodia’s economy is projected to grow by 4.8 percent in 2025, slowing from 6 percent in 2024 as domestic and external shocks weighed on activity.

Softening property sector, border conflict with Thailand and U.S. tariff hike had hampered the Southeast Asian nation’s growth, said the World Bank’s Cambodia Economic Update for December 2025.

The property market downturn has dampened domestic demand and construction activity, while border tensions have disrupted labor markets and tourism, the report said.

On Aug. 1, the United States imposed a 19-percent tariff on all goods imported from Cambodia.

“Cambodia is navigating a challenging period amid combined domestic and external shocks,” said Tania Meyer, World Bank Country Manager for Cambodia.

“Strong buffers and targeted reforms can help the country withstand these economic pressures,” she added.
Meyer said protecting vulnerable households, including returnees, remains essential.

“At the same time, improving the business environment, supporting informal enterprises and easing formalization are critical to unlock growth, level the playing field and create better-quality jobs,” she added.

The report said Cambodia’s international reserves remain healthy, covering around 7.5 months of imports, while public debt is low at around 26 percent of Gross Domestic Product (GDP).

Inflation remains contained at an average of 2.7 percent this year, the report said, adding that foreign direct investment inflows reached 2.3 billion U.S. dollars in the first half of 2025, up 28.4 percent year on year, helping to offset external imbalances.