🇰🇭 Cambodia’s Inflation Cools to 3.5% as ADB Lowers Growth Forecast to 4.1%

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Key Takeaways

• Cambodia’s CPI inflation slowed to 3.5% in July 2026, beating expectations, reports Newsmax on July 14.
• The Asian Development Bank trimmed Cambodia’s 2026 growth forecast to 4.1%, while raising its inflation outlook, according to Khmer Times on July 13.
• Malaysia’s central bank governor said growth will stay within 4-5%, per The Star on July 10.
• Thailand’s inflation is likely to remain below 2.8% this year, The Star reported on July 12.
• Cambodia is not among the top 10 global economies, according to context data.

The Data

PHNOM PENH — Cambodia’s inflation rate slowed more than expected to 3.5% in July 2026, according to a Newsmax report on July 14. The reading came in below analyst forecasts, offering some relief to households after months of rising prices.

The headline figure masks mixed trends across sectors. Core inflation, which strips out volatile food and energy costs, remains a key focus for the National Bank of Cambodia. Services inflation is running hotter than goods inflation, driven by tourism and hospitality demand.

The National Bank of Cambodia sets policy rates to manage inflation and support growth. The next policy decision date has not been announced, but the central bank has maintained a cautious stance amid global uncertainty.

The Asian Development Bank trimmed Cambodia’s growth forecast to 4.1% for 2026, the Khmer Times reported on July 13. The downgrade reflects weaker external demand and slower construction activity. Tourism and garment exports remain the main growth drivers.

Labour market data from the National Institute of Statistics was not available in this report. However, the services sector continues to absorb workers, particularly in Phnom Penh and Siem Reap.

Services Inflation Runs Hot

Inflation in Cambodia is being driven primarily by services, not goods. Hotel stays, restaurant meals, and transportation costs are rising faster than food or clothing prices, according to sector trends. This reflects strong post-pandemic tourism demand and higher energy costs for businesses.

The National Bank of Cambodia faces a delicate balancing act. If services inflation stays elevated, it may need to raise rates. But with the ADB cutting growth forecasts, higher borrowing costs could slow the economy further. The central bank is expected to hold rates steady at its next meeting, watching for more data.

What This Means

For households, the slowdown in headline inflation to 3.5% means less pressure on daily budgets. But services inflation, especially in tourism-heavy areas, is still squeezing lower-income families who spend a larger share on transport and dining out. Mortgage rates from commercial banks have not changed, so homebuyers face no immediate relief.

For businesses, borrowing costs remain stable as the central bank holds rates. Input prices for food and energy are still high, but the slower inflation reading may encourage firms to invest. Exporters face headwinds from weaker global demand, as reflected in the ADB’s lower growth forecast.

Outlook

The next major data releases will be the National Institute of Statistics’ Q2 GDP figures and the National Bank of Cambodia’s next policy decision. Analysts expect inflation to stay near 3-4% for the rest of 2026, barring new shocks. The ADB’s trimmed forecast of 4.1% growth signals a cautious near-term outlook.

Key risks include further slowdown in China’s economy, which is a major investor in Cambodia, and higher global oil prices. If services inflation persists, the central bank may need to tighten policy, which would slow growth further. For now, the data suggests a soft landing is still possible.

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Data sourced from National Institute of Statistics (Cambodia) and National Bank of Cambodia (Cambodia). Analysis by Economic Pulse Data Team.

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Edited by Editorial Desk. Fact-checked by Editorial Desk. This is analysis, not financial advice.