AKP Phnom Penh, June 09, 2026 --

Cambodia’s economy continues to show resilience despite mounting external and domestic pressures, supported by strong foreign investment inflows and robust export performance, according to the World Bank’s latest economic update.

Released on June 9 under the title Navigating Shocks, the World Bank Cambodia Economic Update for June 2026 highlighted that rising global oil prices linked to conflict in the Middle East have created additional pressure on Cambodia’s economy through higher transport and production costs.

The report noted that increasing fuel prices have affected both businesses and households, limiting firms’ ability to sustain employment while raising living costs, particularly for low-income families.

These pressures come as Cambodia also faces a slowdown in the property sector and declining remittances following the return of nearly one million migrant workers. Headline inflation rose to 5.8 percent in April 2026, with the report estimating that a 10 percent increase in fuel prices could raise the poverty rate by 1.4 percentage points.

Despite these challenges, foreign direct investment reached US$5.1 billion in 2025, contributing to the creation of an estimated 400,000 formal jobs while offering critical employment opportunities for workers moving from agriculture and returning migrants.

Goods exports also remain strong, growing by 17.7 percent in the first quarter of 2026. Real GDP growth is projected to moderate to 3.9 percent in 2026 before recovering to 4.9 percent in 2027.

Cambodia's economy is holding in the face of simultaneous shocks, demonstrating a resilience that can be sustained through targeted policy action to protect jobs and livelihoods,” said Ms. Tania Meyer, World Bank Country Manager for Cambodia.

“With the working-age population share projected to peak around 2043, the next 15 to 20 years are decisive for Cambodia's future. Investing in people — in education, in jobs, in new engines of growth — is what will turn Cambodia's demographic window into its greatest competitive advantage,” she said.

The report recommends a multi-pronged policy response focused on protecting livelihoods and supporting job creation while pursuing structural reforms that strengthen competitiveness and productivity.

In the short term, it suggests targeted, time-bound cash transfers to vulnerable households rather than broad fuel-tax relief.

It also emphasises mobilising domestic revenue to sustain and expand essential investments in health, education, and social protection. To ease pressure on rural jobs, fast-tracking fertiliser imports and promoting fuel-efficient farming would help farmers maintain productivity and incomes.

A special focus chapter on Cambodia’s Demographic Transition and the Road to Vision 2050 underscores the urgency of creating quality jobs as the demographic window narrows.
 
Building human capital, boosting productivity, and supporting sectors with strong employment potential remain key priorities while formalisation of the care economy and strategic labour migration policies would unlock more female labour force participation and connect Cambodian workers with regional job opportunities.

By Chea Vannak