Cambodia: 2026 Growth at 2.7%, Services in Decline

• Growth at 2.7% in 2026. Forecast by Mekong Strategic Capital, weakest performance in 17 years excluding COVID.
• Services contraction of 2.1%. Accommodation and food services down 15.5%, international tourism down 27%.
• Industry up 7.1%. Manufacturing, textiles, construction, and exports remain solid.
• Recovery at 6% in 2027. Expected rebound in tourism, financial services, and real estate.
• Possible government stimulus. Could boost growth to 3.3-4.1% in 2026.

The MSC report, published in late August 2026, paints a mixed picture of the Cambodian economy. Here are the key milestones.

1. 2025: The economy shows signs of slowdown, with the services sector already weakened by the closure of online scam compounds.
2. Early 2026: Tourist arrivals drop 27% (international) and 5% (domestic), impacting hospitality and food services.
3. Mid-2026: Bank loans to the construction sector rise 13.3% year-on-year, but real estate remains sluggish.
4. August 29, 2026: MSC publishes its report forecasting 2.7% growth for 2026, with a 2.1% contraction in services.
5. Late 2026: The government considers a stimulus plan to support services, with potential impact on growth.
6. 2027: MSC forecasts a recovery to 6%, driven by tourism and financial services, but some effects of the scam center closures will persist.

The MSC report details performance by sector, illustrating the 'two-speed' nature of the economy.

• Restaurants, hotels, and bars may see lower footfall, with possible closures.
• Commercial and residential rents may stabilize or drop, offering negotiation opportunities.
• Jobs in tourism and services may become scarcer, but manufacturing is hiring.
• Expats in finance or real estate should monitor credit risks and market adjustments.
• The cost of living may remain moderate, but import prices could rise due to currency fluctuations.

1. Diversify your income: Don't rely solely on tourism or services; explore industry-related or e-commerce activities.
2. Negotiate your rents: With lower demand, renegotiate leases for better terms.
3. Follow government announcements: The stimulus plan may create opportunities in certain sectors.
4. Manage your cash flow: In a downturn, build a safety reserve for unexpected events.
5. Invest prudently: Avoid speculative investments in real estate or finance; favor growing sectors like industry.
6. Stay informed: Regularly check economic reports and local news to anticipate changes.
7. Adapt your offering: If you're in services, target niche markets (expats, digital nomads) and adjust prices.