Cambodia’s manufacturing sector is showing strong export momentum, particularly in non-garment products, helping offset weakness in tourism, real estate and other services industries, according to the ASEAN+3 Macroeconomic Research Office (AMRO).
AMRO Chief Economist Dong He said Cambodia’s industrial growth remained solid, supported by both garment and non-garment manufacturing, although the regional economic research organisation has lowered its 2026 growth forecast for Cambodia from 4.2% to 3.9%.
The downgrade mainly reflects what AMRO described as a sluggish recovery in the services sector, particularly tourism and real estate.
Cambodia Economic Outlook at a Glance
| Indicator | AMRO assessment |
|---|---|
| 2026 growth forecast | 3.9% |
| Previous 2026 forecast | 4.2% |
| 2027 growth forecast | 4.9% |
| Non-garment export growth, Jan-Aug 2026 | 37.3% |
| Non-garment export growth in 2025 | 16.8% |
| Garment export growth, Jan-Aug 2026 | 6.7% |
| Fabric import growth, Jan-Aug 2026 | 8.2% |
| 2026 inflation forecast | 4.9% |
| 2027 inflation forecast | 3.0% |
| NPL provisions covering NPLs in 2025 | 71.1% |
Non-garment exports grow 37.3%
Cambodia’s manufacturing export performance has been led increasingly by non-garment products.
During the first eight months of 2026, non-garment manufacturing exports increased 37.3% year-on-year, significantly faster than the 16.8% growth recorded in 2025, according to Dong He.
Garment exports also continued to expand, rising 6.7% year-on-year, while fabric imports increased 8.2% during the same period.
The figures indicate that Cambodia’s export base is generating strong momentum beyond its traditional garment manufacturing sector.
Dong He said manufacturing-related exports were “quite well” positioned, but stressed that Cambodia needs to increase the amount of local value added generated by these exports so stronger manufacturing activity produces wider benefits across the domestic economy.
Services recovery remains a challenge
Despite the strength of manufacturing exports, AMRO said Cambodia’s broader economic recovery remains constrained by weakness in services.
Tourism and real estate were specifically identified as areas where recovery has been sluggish.
Dong He said the government should continue addressing lingering concerns among tourists and investors related to reputational issues and the weaker economic outlook.
AMRO also highlighted the need to carefully manage confidence in Cambodia’s financial system amid legacy challenges related to high non-performing loans (NPLs).
AMRO sees financial stability risks as contained
Despite elevated NPLs and recent bank liquidations, AMRO said risks to system-wide financial stability remain limited.
The organisation said Cambodia’s banking sector maintains capital and liquidity ratios well above regulatory requirements, providing buffers against potential losses.
Banks had also established substantial provisions for credit losses, with specific provisions covering 71.1% of NPLs in 2025, according to AMRO.
AMRO’s Financial Stability Report also found that Cambodian banks’ capital adequacy ratios remain well above minimum regulatory requirements and are among the highest in the region.
The assessment comes shortly after the International Monetary Fund said that systemic risks remain contained despite increased financial vulnerabilities.
The National Bank of Cambodia also rejected social media rumours on October 2 claiming that certain banking and financial institutions were experiencing difficulties or could face problems in the near future, describing the reports as baseless and misleading.
Cambodia needs more local value from exports
AMRO said stronger manufacturing exports provide an opportunity for Cambodia to generate broader economic benefits.
Dong He said the country needs to strengthen infrastructure and increase local value added from exported products so that manufacturing generates greater spillovers to other parts of the economy.
This would support Cambodia’s longer-term objective of building a more diversified, productive and resilient economy.
He also described Cambodia’s ambition to reach upper-middle-income status by 2030 as an important development goal, while stressing that continued structural reforms would be essential.
For Cambodia, the challenge is therefore not simply to increase export volumes, but to strengthen domestic production capabilities, infrastructure and linkages around export-oriented industries.
2027 growth forecast remains at 4.9%
While AMRO lowered its 2026 growth projection, it left its 2027 growth forecast unchanged at 4.9%.
Inflation, measured by consumer prices, is now projected at 4.9% for 2026, slightly below AMRO’s previous forecast of 5.1%.
For 2027, inflation is expected to moderate to 3.0%, although this is slightly higher than the previous projection of 2.8%.
Dong He said the Cambodian government had handled the challenges created by the global energy shock earlier in the year relatively well.
Angkor Times Analysis
Cambodia’s latest economic outlook illustrates an increasingly important shift in the country’s growth structure: manufacturing exports are providing resilience while parts of the services economy remain under pressure.
The 37.3% growth in non-garment manufacturing exports is particularly significant because it points to stronger momentum outside Cambodia’s traditional garment export base. However, export growth alone does not automatically translate into broader domestic economic gains.
AMRO’s emphasis on local value added highlights the next challenge for Cambodia: developing more domestic suppliers, processing capacity, infrastructure and supporting services around export industries. That would allow a greater share of export-generated economic activity to remain within Cambodia.
At the same time, the slower recovery in tourism and real estate means Cambodia’s growth remains dependent on improving multiple sectors rather than relying on manufacturing alone.
The combination of stronger manufacturing, service-sector recovery and continued financial-sector reforms will therefore be important to sustaining growth toward Cambodia’s 2030 development ambitions.
FAQs
Why did AMRO lower Cambodia’s 2026 growth forecast?
AMRO lowered its forecast from 4.2% to 3.9%, mainly because of a sluggish recovery in the services sector, particularly tourism and real estate.
How fast did Cambodia’s non-garment manufacturing exports grow?
Non-garment manufacturing exports increased 37.3% year-on-year during the first eight months of 2026.
What is AMRO forecasting for Cambodia in 2027?
AMRO maintained its 2027 growth forecast at 4.9%.
Does AMRO see Cambodia’s financial system as unstable?
AMRO said risks to system-wide financial stability remain limited, citing strong capital and liquidity ratios and substantial provisions against credit losses.
What does AMRO say Cambodia needs to improve?
AMRO emphasises structural reforms, stronger infrastructure and higher local value added from manufacturing exports to create wider economic spillovers.