Phnom Penh: The World Bank’s latest Global Economic Prospects report has projected Cambodia’s GDP to grow at 5.5 percent for both 2025 and 2026, marking an increase from an estimated 5.3 percent last year. Released in Washington, the report highlights Cambodia as one of the fastest-growing emerging markets and developing economies in East Asia, surpassing nations like China, Indonesia, Malaysia, Laos, Thailand, and Myanmar.
According to Agence Kampuchea Presse, Cambodia’s growth forecasts, while promising, are slightly behind those of Mongolia, Vietnam, and the Philippines. Mongolia is expected to experience a growth of 6.5 percent this year and 6.1 percent next year, Vietnam at 6.6 percent and 6.1 percent, and the Philippines at 6.1 percent and 6.0 percent. China, contrastingly, is forecasted to grow at 4.5 percent this year and 4.0 percent next year.
In other parts of East Asia, Indonesia is projected to maintain a growth rate of 5.1 percent for both years, Malaysia at 4.5 percent and 4.3 percent, Laos at 3.7 percent, and Thailand at 2.9 percent and 2.7 percent. Myanmar is expected to have a modest growth of 2.0 percent this year, with no forecast available for the following year.
The report emphasizes that solid domestic demand is expected to support growth in East Asia and the Pacific, excluding China. Private consumption remains strong due to low inflation and robust labor market conditions, which are expected to enhance household incomes. However, the outlook for public investment across the region remains varied, with investment growth anticipated to rise but not reach pre-pandemic levels.
The World Bank warns of downside risks to the regional outlook, mainly due to adverse global policy changes and weaker-than-expected growth in China, which could have spillover effects on other countries in the region. Uncertainty around global trade policies poses a significant threat, given the reliance of many East Asian and Pacific economies on export-oriented activities linked to global value chains. Rising conflicts and more frequent climate change-related natural disasters add further risks.
World Bank Deputy Chief Economist M. Ayhan Kose advises that developing economies need bold policies to capitalize on untapped opportunities for cross-border cooperation amidst global policy uncertainty and trade tensions. Strategic trade and investment partnerships with rapidly expanding markets in other developing nations, modernizing transportation infrastructure, and standardizing customs processes are critical steps to enhance trade efficiency. Additionally, sound macroeconomic policies are essential for navigating global uncertainties.