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The International Monetary Fund (IMF) said this week that Cambodia’s economic growth will slow sharply to 3% this year from 5.3% in 2025, as higher energy costs, a slump in tourism and falling remittances weigh on the economy.
The forecast comes less than a week after the Asian Development Bank (ADB) cut its 2026 growth projection for Cambodia to 3.9% from 4.1%, also citing weak tourism, the closure of the Thai border and concerns over scam compounds. The ADB nearly doubled its 2026 inflation forecast to 4.7%, while the IMF projects 5.6%.
“Risks to growth are tilted to the downside, while inflation risks remain on the upside,” the IMF said in its assessment. “Trade policy uncertainty and persistent scam activities could further weaken exports and tourism, hamper investment, and raise financial stability concerns.”
The fund expects growth to recover to 4% in 2027, with inflation easing to 3.1% as energy prices normalize.
The Cambodian government is more upbeat, forecasting 4.2% growth this year and 5% in 2027, citing stronger-than-expected non-garment exports, foreign investment, state spending and resilient consumer demand, according to the IMF report. The National Bank of Cambodia expects inflation to average 4.7% this year.
The fund also said the economy held up in 2025 on strong manufacturing exports, foreign investment and infrastructure projects. But international tourist arrivals fell nearly 48% in the first half of 2026 from a year earlier, and border tensions with Thailand prompted nearly 1 million Cambodian migrant workers to return home, cutting remittances.
Although Prime Minister Hun Manet said last week that the country had dismantled all its large-scale scam compounds, the fund said reputational damage from scam activity continues to weigh on tourism and confidence, and that concerns over governance and rule of law are holding back higher-quality foreign investment.
The government this month launched a program of about $1.2 billion to support livelihoods and jobs in the short and medium term. Last week, it began cash payments of 40,000 to 60,000 riel ($10 to $15) per household to poor and at-risk families to help offset rising fuel prices, with further payments due through December. The IMF has recommended phasing out broad fuel subsidies in favor of such targeted support.
The IMF also called it a “significant vulnerability” that Cambodia does not require banks, payment firms and casinos to vet their beneficial owners or show that their funds come from legitimate sources when they are licensed. It urged the National Bank of Cambodia and the country’s gambling regulator to fix the gap as a top priority. Authorities have liquidated five small banks this year, including three sanctioned by the U.S. Treasury over alleged ties to scam networks.
The fund also flagged a rise in bad loans rising to nearly 8% of total lending in 2025.
Economy and Finance Ministry spokesperson Meas Soksensan said the government takes seriously any activity that could undermine confidence in Cambodia.
“At the same time, it is important to recognize that the Royal Government has publicly acknowledged the seriousness of the issue and has taken increasingly strong measures to address it,” he said, adding that Cambodia must protect confidence in its “legitimate economy.”
“Reputation and confidence are economic assets,” Soksensan said.
Ky Sereyvath, an economist and director of the Institute of China Studies at the Royal Academy of Cambodia, said the central bank shares the government’s concerns about the financial sector but may lack the tools to detect illicit transfers.
“I believe there are certain mechanisms where the National Bank might not be able to detect those [illegal] money transfers, especially through cryptocurrencies, which remain outside the National Bank’s control,” Sereyvath said, referring to concerns that scam proceeds are being laundered through licensed banks and payment services.
“If the banking system collapses, it will cause our whole national economy to collapse as well,” he said.
The IMF said financial vulnerabilities have increased but that systemic risks remain contained.
