Synopsis: The IMF forecasts Cambodia’s 2026 economic growth at 3% as national leaders call for targeted measures to protect vulnerable communities.

Cambodia’s economy is projected to grow by 3% in 2026 before recovering to 4% next year, the International Monetary Fund (IMF) said, prompting Senate leaders to call for stronger social protection, economic stimulus and greater diversification to safeguard livelihoods.

The projections were discussed during a working meeting on Thursday afternoon between Senate Second Vice-President Thun Vathana and an IMF team led by Kenichiro Kashiwase, mission chief for Cambodia and Myanmar. The meeting was attended by Yos Phanita, chairman of the Senate’s Second Commission.

Vathana acknowledged that economic assessments by the IMF, World Bank, Asian Development Bank (ADB), AMRO, MSC and the government point towards slower growth and higher inflation compared with previous years.

He noted that agricultural and industrial exports continue to expand, providing an important source of income for farmers and workers.

Kashiwase said the IMF conducts economic surveillance missions to Cambodia twice annually, describing the exercise as a regular health check-up for the economy.

According to the IMF assessment, growth is expected to slow to 3% this year amid external headwinds before recovering to 4% in 2027, supported by export momentum.

Vathana raised concerns over the impact of ongoing global conflicts and geopolitical tensions, which have disrupted supply chains, increased inflation and placed burdens on households.

He highlighted difficulties facing vulnerable populations and communities along the border, stressing the importance of ensuring that economic policies translate into support for those affected.

Following the meeting, Vathana said both sides discussed differences in economic assessments and the implications of slower growth and elevated inflation for ordinary Cambodians.

“We also discussed the high inflation this year, which affects people’s livelihoods,” he said.

He added that discussions produced a shared understanding of the need to strengthen social protection for vulnerable populations while introducing economic stimulus packages targeting employment generation and productivity.

Kashiwase commended Cambodia’s economic resilience and encouraged sustained investment in priority sectors, particularly healthcare, education and infrastructure.

He underscored the importance of improving governance, strengthening tax and customs revenue mobilisation, and reviewing investment incentives to enhance capacity against shocks.

The IMF mission chief expressed confidence in the workforce, praising workers for adaptability and quick learning, which provide a foundation for a skilled labour force.

The delegation highlighted the need for comprehensive support packages covering infrastructure, modern logistics, energy security and an enabling business environment for micro, small and medium enterprises (MSMEs).

Vathana emphasised the importance of exploring low-interest financing and accessible credit mechanisms for farmers and SMEs, describing them as drivers of domestic employment, productivity and growth.

Economic diversification featured prominently in the discussion, with both sides exchanging views on research and investment opportunities to expand agricultural value chains beyond traditional products.

Vathana proposed exploring the commercial potential of coffee and cocoa, alongside cashew nuts, to diversify agricultural production, create income opportunities and strengthen domestic value creation.

He raised the need to expand vocational training opportunities, particularly for workers who have returned from Thailand, to help them acquire new skills and reintegrate into the domestic labour market.

“We also discussed economic diversification. I proposed some potential sectors, such as coffee beans and cocoa. We talked about boosting vocational training for workers, especially those who came back from Thailand,” Vathana said.

The Senate leadership reiterated that social protection must remain central to Cambodia’s economic response as slower growth and inflation affect household purchasing power.

Vathana called for closer cooperation between Cambodia and the IMF to support sustainable, resilient and inclusive economic development.