Cambodia has experienced rapid economic growth over the last two decades, with gross domestic product (GDP) growing around seven percent per year until the COVID-19 pandemic. After Cambodia reopened its economy in November 2021, GDP growth has steadily recovered, and the World Bank predicts Cambodia’s GDP growth at 4 percent in 2025 and 4.5 percent in 2026. An IMF team reported real GDP growth in 2024 reached 6 percent as a result of strong garment and agriculture exports along with recovery in the tourism sector. While that momentum continued in early 2025, the IMF expected growth to moderate to 4.8 percent in 2025.

According to the World Bank, Cambodia’s growth is predicted to be driven primarily by continued recovery in tourism and export sectors. However, the country faces significant challenges, including global uncertainty, shifts in trade policies, tightening credit conditions, and a border conflict with Thailand. Inflation is expected to reach 2.4 percent in 2025, compared to 0.8 percent in 2024, as forecasted by the National Bank of Cambodia.

Despite challenges, Cambodia has demonstrated resilience, with the industrial sector growing at 7.1 percent, services at 3.8 percent, and agriculture at 0.9 percent, according to the Ministry of Economy and Finance (MEF). The United States remains Cambodia’s largest single-country export destination, accounting for approximately 38 percent of total exports, primarily garments, footwear, and travel goods. In 2024, Cambodia exported $12.6 billion in goods to the United States, a 10 percent increase from the previous year, while U.S. exports to Cambodia totaled $319 million.

The United States and Cambodia are signatories to a 2006 Trade and Investment Framework Agreement (TIFA), which aims to promote greater trade and investment between the two countries and provides a platform for addressing bilateral trade and investment issues. Cambodia is a member of the Association of Southeast Asian Nations (ASEAN), the ASEAN Free Trade Area (AFTA) and the Regional Comprehensive Economic Partnership (RCEP). Cambodia implemented bilateral free trade agreements (FTA) with the People’s Republic of China and the Republic of Korea (ROK) in 2022, and the United Arab Emirates (UAE) in 2024.

While Cambodia remains open to foreign investment, the country has not historically attracted significant U.S. investment for several reasons, including limited supply of skilled labor, inadequate infrastructure, systemic corruption, lack of transparency, and weak regulatory environment. In light of some of these concerns, the U.S. Departments of State, Treasury, and Commerce issued a business advisory in 2021, cautioning U.S. businesses currently operating, or considering operating in Cambodia to be vigilant about interactions with entities linked to corrupt practices, criminal activities, and human rights abuses. In September 2024 and September 2025, the U.S. Treasury Department announced sanctions against multiple individuals and businesses for their involvement in online scam centers in Cambodia. The U.S. Treasury Department in 2025 designated Cambodian financial conglomerate Huione Group an entity of primary money laundering concern related to cyber scams and DPRK cyber heists.

Over the past decade, China has fulfilled most of Cambodia’s foreign direct investment needs, highlighting China’s desire for influence in Cambodia, and Southeast Asia more broadly. Moreover, Chinese businesses, many of which are state-owned enterprises, may not assess the challenges in Cambodia’s business environment in the same manner as U.S. businesses.  However, Cambodia’s heavy reliance on Chinese investment exposes vulnerabilities in its economy. These risks are particularly pronounced as China’s economic slowdown has had a corresponding negative impact on Cambodia’s growth trajectory.

Political Environment

Visit the State Department’s website for background on Cambodia’s political and economic environment.