Cambodia’s economy is experiencing a robust recovery following the COVID-19 pandemic. In 2024, the country’s real GDP grew by approximately 5.8%, with projections indicating a further increase to 6.1% in 2025. This resurgence is primarily driven by the revitalization of key sectors such as manufacturing, tourism, agriculture, and digital finance.
Here’s a breakdown of the key factors behind Cambodia’s economic revival.
Manufacturing and Export Growth
Cambodia’s manufacturing sector has rebounded strongly, with exports reaching $26 billion in 2024, marking a 16.9% increase year-on-year. The sector has diversified from traditional textiles and garments into new industries, such as electronics and electric vehicle production. A major development is the construction of a new factory by BYD, a Chinese electric vehicle manufacturer, in the Sihanoukville Special Economic Zone. This facility, aimed at producing 10,000 vehicles annually, signals Cambodia’s shift towards higher-value manufacturing.
The country has also attracted substantial foreign direct investment (FDI), with 326 new factories opening in 2024 alone, bringing the total number of manufacturing facilities to over 2,400. This expansion is fueling local employment and contributing significantly to Cambodia’s export revenues.
Tourism Revival
Tourism, which contributes approximately 12% to Cambodia’s GDP, is experiencing a strong recovery. In 2024, the country welcomed 6.7 million international tourists, a 23% increase from the previous year. The revival is supported by the easing of travel restrictions and new infrastructure projects, including the Techo International Airport, set to open in July 2025. The airport, with an initial capacity of 13 million passengers, is expected to further boost Cambodia’s connectivity and tourism sector.
The Cambodian government is also focusing on sustainable tourism initiatives, promoting eco-tourism and cultural heritage to attract visitors year-round.
Agricultural Modernization
Agriculture remains a vital sector, contributing about 16.7% to Cambodia’s GDP. The government has implemented reforms to increase productivity, improve irrigation, and introduce modern farming techniques. In 2024, agricultural exports reached $4.8 billion, accounting for over 20% of total exports. Key products include rice, rubber, and cassava, which are seeing increased demand in international markets.
The government is promoting smart farming technologies and agricultural diversification, which has led to greater demand for organic and high-value crops, such as fruits and vegetables. These initiatives are expected to further strengthen Cambodia’s agricultural sector.
Digital Finance and Innovation
Cambodia is emerging as a leader in digital financial inclusion, driven by the Bakong system, a digital currency platform launched by the National Bank of Cambodia. In 2024, Bakong processed transactions worth $105 billion, over three times Cambodia’s GDP. The system has significantly expanded access to financial services, especially in rural areas, and has improved payment systems for businesses and individuals.
The adoption of QR-based payment systems has also seen strong growth, with 36% of Cambodians using QR codes for payments by the end of 2024. This shift towards digital finance is improving financial inclusion and supporting economic activity across the country.
Infrastructure Development
Infrastructure development plays a crucial role in Cambodia’s long-term economic strategy. One of the key projects is the Funan Techo Canal, designed to reduce Cambodia’s reliance on Vietnamese ports and improve trade efficiency. While the canal’s funding is still uncertain, it is expected to provide direct access to the Gulf of Thailand, boosting Cambodia’s competitiveness in global trade.
Other infrastructure projects, including highways and railways, are improving regional connectivity, which will benefit the construction and real estate sectors. However, the real estate market is undergoing a correction after a period of rapid expansion, which may slow growth in the short term.
Challenges and Risks
Despite the positive outlook, Cambodia faces challenges that could impede its economic growth. The real estate sector is adjusting after a boom in previous years, and the banking sector is experiencing rising non-performing loans, which could pose risks to financial stability. These challenges underscore the need for continued regulatory oversight and prudent economic management.
Cambodia’s post-pandemic economic recovery is being driven by a combination of manufacturing expansion, tourism revival, agricultural modernization, digital finance innovation, and infrastructure development. While challenges remain, the country’s diversified economy and ongoing reforms position it for continued growth. With sustained investment in key sectors, Cambodia is on track for sustained economic development in the coming years.
