AKP Phnom Penh, October 5, 2026 --

Cambodia’s strong exports of manufactured goods — especially non-garment merchandise — are offsetting weak services industries, the chief economist of the ASEAN+3 Macroeconomic Research Office (AMRO) said Monday.

Speaking at a news conference in Singapore on the quarterly update to AMRO’s regional economic outlook, Mr. Dong He, Chief Economist at AMRO, said: “Cambodia’s industry growth has been quite solid, supported by both garment and non-garment manufacturing.

“Garment exports and fabric imports grew by 6.7 percent and 8.2 percent year-on-year respectively in the first eight months of this year.

“But what is also remarkable is non-garment manufacturing exports grew by 37.3 percent year-on-year in the first eight months — much faster than 16.8 [percent] growth recorded in 2025.”

According to Mr. He, AMRO’s lowering of Cambodia’s growth forecast for this year from 4.2 percent in July to 3.9 percent mainly reflects a “sluggish recovery in the service sector, particularly in tourism and real estate.”

MANAGING CONFIDENCE

To support recovery in the sector, “the government should continue addressing tourists’, investors’ lingering concerns over reputational issues and the weaker economic outlook.

“Of course, there is another important point … There is a legacy problem from the high non-performing loans (NPLs) in the financial system. So the authorities should take timely actions while carefully managing confidence in the financial system.”

The chief economist said Cambodia’s goal of achieving upper middle-income status by 2030 was an “important development,” adding that “continued structural reforms would be essential to build a more diversified, productive and resilient economy.”

With manufacturing-related exports doing “quite well,” the challenge is to ensure that “local value added from these exports can be higher so there’ll be more spillovers from this export sector to the rest of the economy by strengthening infrastructure but, of course, addressing some of the service-sector-related problems.

“I think that would help Cambodia achieve higher sustainable growth,” he said.

In the update to its economic outlook released earlier Monday, AMRO left its growth forecast for Cambodia in 2027 unchanged at 4.9 percent.

Inflation — as measured by consumer prices — is expected to reach 4.9 percent, down from AMRO’s projection of 5.1 percent in July.

The government handled challenges from the global energy shock earlier in the year “quite well,” Mr. He said.

For 2027, inflation is expected to fall to 3.0 percent, up from 2.8 percent forecast in July.

BUFFERS AGAINST LOSSES

In a written response to follow-up questions, AMRO said: “Despite elevated NPLs and recent bank liquidations, risks to system-wide financial stability remain limited.”

“The banking sector maintains capital and liquidity ratios well above regulatory requirements, providing buffers against potential losses,” it said.

“Banks have also set aside substantial provisions for credit losses, with specific provisions covering 71.1 percent of NPLs in 2025.”

According to AMRO’s annual Financial Stability Report — also released Monday — Cambodia’s capital adequacy ratios for banks are well above minimum requirements — and the highest in the region after Hong Kong and Indonesia.

‘SYSTEMIC RISKS REMAIN CONTAINED’

In its assessment of the Cambodian economy released last week, the executive board of the International Monetary Fund said “systemic risks remain contained” despite increased financial vulnerabilities.

On Friday, the National Bank of Cambodia (NBC) rejected rumours circulating on social media claiming that certain banking and financial institutions are facing difficulties or could encounter problems in the near future, describing the reports as baseless and misleading.

By Sao Da (Photo: AMRO)