Cambodia’s 2025 Economic Growth Expectations

Several new economic forecasts and retrospective reports have been released at the start of 2025, trying to piece together a picture of the investment climate for Cambodia, the economic opportunities and how the construction & property sector is shaping up in 2025.

GDP, Foreign Investment, Sector Outlook

Recent statements from the Cambodian government suggested Cambodia reached approximately 5.3 per cent GDP growth in 2024 and they foresee optimistic growth projections; forecasting an economic growth rate of approximately 6.3 per cent in 2025 according to the Budget in Brief report for the Fiscal Year 2025 released by the Ministry of Economy and Finance (MEF).

In January 2025,  IMF released its Article IV 2025 Report on Cambodia which anticipates GDP growth of 5.8 per cent for Cambodia. They added,  “We project real GDP to grow from 5.5 per cent in 2024 to 5.8 per cent in 2025 and inflation to pick up from 0.5 per cent in 2024 to 2 per cent in 2025 and remain contained.”

The 2025 IMF report said, “After a sustained credit expansion that lifted the credit-to-GDP ratio from 24 per cent in 2010 to 135 per cent in 2023, credit growth has come to a near halt. The construction and real estate sectors are undergoing a correction, with rising non-performing loans and emerging signs of private-sector debt overhang.”

Some of the economic data sets from the IMF 2025 report for the Kingdom are:

• Cambodian Construction’s contribution to GDP increased significantly in the pre-pandemic decade, to an average of 17 per cent of overall growth.
• As a sector, construction activities accounted for 10 per cent of loans or bank credit to the private sector in 2024.
• Long-term - under the new project method employed by the IMF - the average forecast for Cambodian GDP growth is 5.8 per cent and the median forecast is 6.3 per cent. If Cambodia’s economy outperforms the forecasts could reach 7.5 per cent to 7.9 per cent for 2030.
• The Ministry of Tourism (MoT) confirmed that the total number of international tourists in 2024 was 6.7 which was a 23 per cent increase compared to 2023, it still beats the record number achieved pre-pandemic in 2019 of 6.6 million.

Meanwhile an update from the coastal hotspot of Sihanoukville, the ‘Special Investment Promotion Programme in Sihanouk Province 2024’ has been extended until at least the end of 2025. The Cambodian government and task group have approved special incentives for 42 investment and business projects in Sihanoukville with a budget of US $565 million.

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The World Bank had previously anticipated growth of 6.1 per cent in 2025 and 6.4 per cent in 2026 for Cambodia, but their latest Global Economic Prospects report now forecasts Cambodia’s GDP growth at 5.5 per cent in 2025 and 2026. Meanwhile, the Asian Development Bank predicts a 6 per cent growth rate for Cambodia in 2025

• Gross Domestic Product (GDP) is expected to reach approximately US $51.39 billion in 2025
• GDP per capita is anticipated to reach US $2,924 in 2025
• The annual inflation rate is projected to be around 2.5 per cent by 2025

In total, there was US $6.9 fixed-asset investment capital in Cambodia during 2024 which was an increase of 54 per cent compared to 2023 (which saw 268 projects). 414 investment projects were approved which are estimated to create approximately 320,000 jobs.

The Council for the Development of Cambodia (CDC) reported that China remained Cambodia’s largest source of foreign investment and accounted for almost half of the total investment in 2024 valued at US $3.43 billion - even though the leader in Cambodian investment, in actual terms there was a 16.2 per cent decline compared to 66 per cent dominance in 2023.

Domestic and Vietnamese investments rounded out the top three sources of FDI for Cambodia, while other foreign investors included South Korea, Singapore, Japan, Malaysia, Thailand, Canada, and the United Kingdom.

Investment Climate - Cambodian Special Economic Zones

Special Economic Zones remain a key source of investment for Cambodia. The Cambodian Ministry of Commerce reported that at the end of 2024, the Kingdom had approved 49 investment projects in economic zones, with 26 special economic zones currently in operation in Cambodia. 

The year also saw ten new Special Economic Zones (SEZs) being established with registered capital valued at approximately US $850 million. The total export value from Cambodian Special Economic Zones in 2024 was more than US $5 billion.

Cambodia has been ranked as one of the top 20 priority destinations (13th) for investment or business development by US and European foreign investors according to a survey from Standard Chartered.

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Cambodia’s Construction & Property Sector in 2024-2025

The final economic data for the construction and real estate sector in Cambodia for 2024 are still to be released, but the sector continues to face stabilisation and price corrections. The approved investment projects fell to around 2,190 projects with a total value of around US $4 billion by the start of Q4 2024.

The Ministry of Land Management, Urban Planning, and Construction (MLMUPC) previously stated that they expected investment projects in the construction sector last year to cover an area of more than 10 million square meters with a total investment of US $4.33 billion.

One report suggested that Cambodia’s construction industry could increase by 7.3 per cent a year from 2026-2028 but this was based on the large infrastructure projects proceeding and being on time (we have already seen projects in January not hit the launch dates) but generally, industry experts anticipate that there will be challenges in 2025 to overcome with some opportunities too.

CBRE 2025 Cambodia - Fearless Forecast Report

According to 2024 data from the CBRE Fearless Forecast report, between 2006 and 2020 the size of the capital of Phnom Penh had nearly doubled from 375 square kilometres of 7 districts with just over one million people to close to 700 square kilometres (14 districts) and a population exceeding 2.2 million. The expectations are that by 2030 the size could extend beyond 100 kilometres.

In terms of the property sector date for 2024 - most  indicators suggested declines compared to 2023:

• Office Occupancy Rate - 65.1 per cent  (the global benchmark of 85-90 per cent)
• Office Prime Rent Rate - US $27 sqm
• Retail Occupancy Rate - 61.8 per cent the (global standard for retail occupancy is 90-95 per cent for healthy retail markets)
• Retail Prime Rent Rate - US $22.6 sqm
• Condo New Launches - +3200 units
• Condo High-end Sale Price - US $2,650 sqm
• Serviced Apartments - +240 units
• Serviced Apartments Sale Price - Grade A rent US $19.3 sqm

The Cambodian condominium sector maintained competitive pricing when compared to the region and the report added that “Luxury condominiums in Bangkok average US $6,500 per square metre while mid-range units in Phnom Penh typically command US $2,200 per square metre.”

The sector shows promise as market research indicates that successful serviced apartments typically achieve occupancy rates between 88 per cent and 92 per cent in prime Asian locations, suggesting there is room for growth in Cambodia’s market.

There are five construction projects due for completion in 2025 although no new shopping malls are due in 2025 (this does not include community malls), while the Grade A Offices will triple in supply with new projects entering the market.

• GDT Tower
• Vue Aston
• 60M Community Mall
• FTB Tower
• Chief Tower

As has been our consistent advice - development projects that are currently performing well and maintaining strong sales in Cambodia tend to be located in city centres, where demand remains high. Additionally, developments spearheaded by seasoned developers with a solid reputation are more likely to succeed.