Cambodia’s economic outlook for 2025 is optimistic, with Cambodia’s tourism sector demonstrating a robust recovery in 2024, contributing approximately US$7 billion to the economy; a significant increase supported by international arrivals nearing pre-pandemic levels. Economic growth is anticipated to reach 6.3%, and GDP per capita is predicted to soar to around US$3,000 in 2025, representing an increase of over 40% over 2024 estimates. U.S. tourists played a vital role in this resurgence, ranking among the top contributors to Cambodia's tourism revenue. Key attractions, including Angkor Wat and emerging ecotourism destinations, drew global attention as Cambodia diversified its offerings. The government's initiatives, such as the "Cambodia: Safe and Green" campaign, further boosted confidence among international visitors by promoting sustainable and eco-friendly travel options. Partnerships with international airlines improved connectivity, particularly with new routes targeting North American travelers.
Infrastructure investments and streamlined visa processes underpinned the sector's growth, making Cambodia more accessible and tourist-friendly. The government’s long-term tourism strategy emphasized sustainable development, supported by collaboration with global organizations like the World Tourism Organization and the Asian Development Bank to achieve carbon neutrality by 2050. This focus on green infrastructure and conservation aligns with Cambodia’s broader goals of balancing economic growth with environmental stewardship.
Cambodia’s upcoming transition from Least Developed Country (LDC) status by 2029 is another significant economic milestone, underscoring its growth and readiness to participate more fully in the global economy. Exiting LDC status signals a move toward economic self-reliance and opens new opportunities for foreign investment. However, it also implies adjustments, particularly in its export sectors. Tariffs on most exports, including textiles, agriculture, and bicycles, are expected to rise to an average of 11.5% under the most-favored nation (MFN) rate. This shift could significantly impact Cambodia's economic growth, given its reliance on preferential trade agreements for global market access. The Cambodian government is addressing these challenges by prioritizing economic resilience and diversification in targeting emerging markets such as Japan, BRICS nations, Latin America, and the Middle East.
To further ensure Cambodia’s economic stability during this transition, the government has implemented the Pentagonal Strategy Phase 1, which is crucial for navigating the challenges posed by its evolving economic landscape. This strategy prioritizes human capital development, infrastructure improvement, and technological advancement to enhance competitiveness. It focuses on creating opportunities for all citizens through investments in people, roads, water, electricity, and technology—key sectors critical for building a resilient and diversified economy. As part of this effort, Cambodia is emphasizing vocational education and digital skills training to prepare the workforce for a knowledge-based economy, addressing the gaps left by pandemic disruptions.
