According to the Cambodian People’s Party (CPP), Cambodia’s GDP is projected to grow by 6.3 percent in 2025. This growth rate marks a return to pre-pandemic levels, supported by stable inflation and a steady exchange rate. The Asian Development Bank (ADB) has a slightly more conservative estimate, projecting a 6% growth rate for the same year. This strong economic outlook presents several lucrative investment opportunities for foreign investors, particularly in infrastructure development, tourism, and manufacturing. 

Infrastructure development: Expanding connectivity and efficiency

Cambodia is prioritizing infrastructure development to support long-term economic growth and improve connectivity within the country and the broader ASEAN region. The Cambodian government has approved a budget of $9.32 billion for 2025, with a significant portion allocated to infrastructure development, including energy projects and increasing water supply capacity in Phnom Penh and Siem Reap.

Private sector investment is expected to play a crucial role in Cambodia’s infrastructure development, with key sectors attracting investment including manufacturing, tourism, and real estate. The International Business Chamber of Cambodia (IBC) highlighted that the financial sector alone saw US$30 billion in new loan disbursements. Additionally, the Royal Government of Cambodia has identified three priority sectors for Public-Private Partnership (PPP) projects from 2025 to 2035: transportation and logistics, energy, and public services (clean water supply and waste management). These projects are expected to attract significant private investment and international partnerships.

Several major infrastructure projects are set to transform Cambodia’s connectivity and trade capabilities. The Techo International Airport, set to launch in early 2025, will handle up to 13 million passengers annually in its first phase, with plans to expand to 50 million passengers by 2050. The Sihanoukville Port Expansion aims to enhance Cambodia’s maritime trade capacity, while the Phnom Penh Logistics Centre seeks to improve logistics and transportation infrastructure in the capital, facilitating better trade and commerce. Additionally, the Kampot International Tourism Port is expected to boost tourism and trade in the coastal province of Kampot, providing better access for international visitors.

Tourism: A strong rebound in international arrivals

Tourism, a key pillar of Cambodia’s economy, is poised for a strong recovery in 2025, benefiting from government incentives and improved infrastructure. Cambodia aims to attract 7.5 million international tourists in 2025, following a successful 2024 with 6.7 million visitors. Tourism currently contributes approximately 12% of Cambodia’s GDP, and this figure is expected to grow as international arrivals increase and tourism infrastructure expands.

Several new tourism projects are set to enhance Cambodia’s appeal to global visitors. The Techo International Airport will significantly boost international arrivals, while the Sihanoukville Port Expansion will enhance Cambodia’s maritime trade and tourism capacity. The Kampot International Tourism Port is expected to attract more tourists to the coastal province. Meanwhile, eco-tourism initiatives such as investments in sustainable tourism projects, including eco-resorts and nature conservation areas, will contribute to the growing demand for responsible travel. The restoration and promotion of historical sites like Angkor Wat and other cultural landmarks will further bolster the country’s cultural tourism sector.

Government policies continue to support tourism growth through streamlined visa applications, including the e-Visa and e-Arrival systems, which have reduced visa fees to enhance accessibility. The government has also introduced tax incentives such as exemptions and reductions for new tourism-related projects to attract foreign investment. Other incentives include monthly tax exemptions, except for VAT and accommodation tax, and annual income tax exemptions for tourism businesses for 2024, with credits applied toward 2025. Additionally, audit exemptions for tourism businesses in Siem Reap until June 2025 and penalty waivers for tax return amendments provide further relief to tourism enterprises.

Manufacturing: A competitive alternative to Vietnam and Thailand

Cambodia’s manufacturing sector continues to expand rapidly, driven by low labor costs, trade agreements, and investment-friendly policies. The textiles and garments sector remains the backbone of the industry, with exports reaching US$12.8 billion in 2023. This industry employs approximately 918,718 workers across 1,680 factories and contributes over one-third of Cambodia’s GDP.

The electronics sector is also experiencing substantial growth, with projections indicating a 10.34 percent annual growth rate from 2025 to 2029, reaching a market volume of $461.20 million by 2029. Multinational companies are increasingly investing in production and assembly facilities, making Cambodia an emerging hub for electronics manufacturing. Meanwhile, the automotive parts sector has attracted US$1.687 billion in committed investment capital as of April 2024, with exports growing at a 10 percent compound annual growth rate (CAGR) from 2020 to 2022. The sector now produces over 400,000 motorcycles annually.

The food processing industry is another promising area, projected to grow at a CAGR of 14.5 percent from 2022 to 2027. Key products in this sector include processed fruits and vegetables, meat, poultry, fish, and grains. Cambodia is increasingly exporting processed food and agricultural products, enhancing its competitiveness in global markets.

Conclusion: A promising outlook for foreign investors

Cambodia’s 6.3 percent projected GDP growth in 2025 signals a strong investment climate, with key infrastructure, tourism, and manufacturing opportunities. The government’s business-friendly policies, trade agreements, and ongoing development projects make Cambodia an attractive destination for foreign capital.

While challenges exist, the long-term growth trajectory remains positive, making Cambodia a key emerging Southeast Asian market for 2025 and beyond.