Cambodia’s economy expanded by 5.9% in the first half of 2025, supported by strong growth in manufacturing, tourism, and agriculture, according to the National Bank of Cambodia’s (NBC) First Semester Report and Second Semester Outlook released on August 4.

As written by Khmer Times, while the outlook remains positive, NBC warned that the economy faces rising external risks amid a fragile global environment.

“The global economy continues to be affected by growing uncertainty from protectionist trade policies, armed conflicts, and geopolitical tensions,” the report noted. “These factors have slowed global growth, although easing inflation in many countries has allowed central banks to lower interest rates to stimulate economic activity.”

During the first half of the year, Cambodia’s inflation rate stood at 3.5%, mainly driven by higher food prices and core inflation, despite falling fuel costs. The riel appreciated by 1.6% year-on-year, averaging 4,011 riels per US dollar.

The Kingdom’s external position remained strong, recording a balance of payments surplus of $275.5mn, largely due to financial account inflows. International reserves rose to $24.8bn, enough to cover 7.5 months of imports.

The banking sector also displayed resilience, with assets rising 7.3%, credit up 2.9%, and deposits climbing 14.5%. However, credit growth remained modest, and non-performing loans edged up to 8.3%.

Capital adequacy ratios stayed well above regulatory requirements, with deposit-taking institutions at 22.8% and non-deposit-taking institutions at 31.6%. Liquidity levels remained robust at 185%, far exceeding the 100% minimum.

NBC reaffirmed its commitment to financial stability, pledging to step up supervision, risk monitoring, and collaboration with relevant stakeholders to encourage lending, reduce interest rates, and support loan restructuring.

Economist Darin Duch urged the government to strengthen resilience through economic diversification, digitalisation, and green growth. He also highlighted Cambodia’s comparative advantage in garment exports to the United States, owing to preferential tariff treatment, and called for deeper trade partnerships, infrastructure investment, and reforms to enhance competitiveness.

However, Duch cautioned that global headwinds, slower growth, geopolitical tensions, and border frictions with Thailand, pose potential risks to Cambodia’s outlook. “Maintaining export diversification, improving logistics, and investing in core sectors such as garments, tourism, and agriculture will be key,” he said.

Anthony Galliano, CEO of Cambodian Investment Management Group and Vice-President of AmCham Cambodia, described the 5.9% growth as a “commendable performance” amid global challenges. He cited a surge in exports, particularly a 25% rise in shipments to the US, along with a rebound in household consumption and major infrastructure spending as the primary drivers.

However, Galliano warned that frontloaded US orders due to tariff uncertainty may slow in the second half, while concerns over transshipment and geopolitical risks could dampen investor sentiment. 

He stressed the importance of upgrading Cambodia’s manufacturing base and moving towards higher-skilled industries, including automotive manufacturing, supported by improved logistics, infrastructure, and energy affordability.

NBC’s report also highlighted ongoing financial sector reforms, including the development of a deposit protection scheme and sustainable finance initiatives, to support the country’s transition towards a green and digital economy.

While growth is expected to moderate in the second half of 2025 due to global headwinds, NBC underscored that prudent monetary policy, financial sector resilience, and ongoing structural reforms will be crucial in sustaining Cambodia’s economic stability and long-term competitiveness.