ANN/THE PHNOM PENH POST – Cambodia’s industrial sector is set to remain the key driver of economic growth in 2025, with an expected growth rate of 8.6 per cent, up from 8.5 per cent in 2024.
The Ministry of Economy and Finance’s ‘Budget in Brief Fiscal Year 2025’ forecasts the economy to grow by 6.3 per cent in 2025, despite ongoing domestic and international challenges threatening long-term development.
The industrial sector is projected to lead this growth, followed by the services sector at 5.6 per cent and agriculture at 1.1 per cent. In 2024, the economy was estimated to grow by 6.6 per cent, driven by industrial growth at 8.5 per cent, services at 6.9 per cent, and agriculture at 1.1 per cent.
Strong industrial growth is attributed to a balanced performance in garment and non-garment manufacturing. The garment sub-sector is nearing pre-pandemic growth levels due to rising global demand and the ‘Cambodian Garment, Footwear, and Bag Sector Development Strategy 2022-2027’.
The non-garment manufacturing continues to grow, supported by robust external demand.
Similarly, the food and beverage manufacturing sub-sector is also predicted to continue its positive growth.
However, the construction sector is expected to continue growing at a slower pace than usual due to a slow recovery in foreign investment, particularly in tourism-related and commercial construction, while residential construction is expected to maintain lower growth than pre-pandemic trends.
The report noted that the service sector is expected to grow by 5.6 per cent due to sustained growth in hospitality and food services, as well as tourism-related services. As for the agriculture sector, it is expected to grow by 1.1 per cent in 2025, driven by good prospects in the crop and livestock sub-sectors and gradual recovery in the fisheries sub-sector.
Economist at the Royal Academy of Cambodia Hong Vanak told The Post that political stability, reforms to investment laws and the development of skilled human resources have helped Cambodia attract more investment, especially in the establishment of factories and manufacturing enterprises aimed at producing export goods.
He also mentioned how the government’s efforts to negotiating trade agreements with various countries have been instrumental in attracting investors to open factories.
