Why Cambodia

Cambodia has experienced significant levels of economic growth over the last two decades. With its growing population of over 17 million , around 65 per cent of whom are under age 35, Cambodia reached lower middle income status in 2015, and aims to reach upper middle income status by 2030. As more Cambodians enter the middle class, demand is growing for goods and services such as appliances, home furnishings, education and healthcare. However, purchasing power remains lower in Cambodia than in many other Southeast Asian markets.

The garment, tourism and agriculture sectors remain the backbone of Cambodia’s economy. Economic productivity remains low as a large share of Cambodia’s population remains employed in traditional agriculture. Cambodia’s manufacturing sector has expanded in recent years into electrical and car parts, bicycles and rubber. This has been made possible, in part, by increases in electricity capacity although prices remain high relative to the region. Continued industrial growth will require greater investment in infrastructure to support rural-urban connectivity, modern transportation and logistics networks.

Cambodia is heavily reliant on development funding and foreign direct investment, which accounts for nearly half of all investment in the country. Although government policies are supportive of foreign investment, the ruling Cambodian People’s Party retains a great deal of influence over economic policy and investment.

Cambodia has long-standing economic ties to other Asian markets such as China, Hong Kong, Singapore and Vietnam. A variety of multilateral free trade agreements, as well as its current status among the Least Developed Countries, concluding in 2029 , grant it tariff-free access to major markets and make it a potential base for business activities.

Its geographic location along the Southern Economic Corridor development project, connecting Myanmar, Thailand, Cambodia and Vietnam, provides access to supply chains and international shipping infrastructure. However, the recent border tensions with Thailand have impacted cross-border trade, remittances and tourism.

Cambodia has fostered strong relationships with both the United States and China. While this is advantageous for accessing trade and investment opportunities, Australian businesses should be mindful of potential geopolitical risks.

Invested: Australia's Southeast Asia Economic Strategy to 2040 identifies Cambodia as one of its regional trade and investment partners expected to enjoy rapid economic growth. In 2025, the value of two-way trade was over AUD 1.85 billion, up 9 per cent from the previous year. Cambodia and Australia are members of the ASEAN-Australia-New Zealand Free Trade Agreement and the Resilient Comprehensive Economic Partnership agreement, both of which help to support trade throughout the region.

Australia also plays an important role in supporting Cambodia’s advancement from Least Developed Country status through the Cambodia Australia Partnership for Regional Economic Development. This program aims to help Cambodia grow its economy through diversification, export competitiveness and trade policy. More information is available in Section 5.1 and from the Department of Foreign Affairs and Trade’s Cambodia Country Brief. 

Cambodia’s growing population and commitment to trade-friendly policies make it a potential export destination for Australian businesses. Opportunities for investment exist in light manufacturing, resources agriculture and agro-prcoessing, tourism and the green economy. Cambodia’s long- term economic growth will depend on continued efforts to improve its business environment with stronger regulatory and anti-corruption frameworks, as well as its resilience toward geopolitical headwinds.

Comparing key indicators: Cambodia and Australia

Figure 1: Real GDP Growth – Cambodia and world average (2016 – 2030f), %

Cambodia’s growth trajectory presents opportunities for Australian trade and investment, particularly in sectors that align with Cambodia’s economic development priorities and its growing middle class. This section provides a short overview of prospective sectors.

Consumer products

As urbanisation increases, more middle-class consumers are willing to pay for products, such as household appliances, that improve their quality of life. However, Cambodia’s relatively low incomes mean that consumers often have less purchasing power than in other parts of the region. As incomes increase, Cambodia’s hot and humid climate is likely to drive demand for air conditioning units. Few buildings have central air and energy is expensive, making energy efficient household units popular. Additional market opportunities include household water purification equipment, other energy efficient appliances such as washing machines and home furnishings.

Education

Education is an area of both economic and cultural exchange between Australia and Cambodia. Australia is the top English-speaking destination for Cambodian students, and its education system has an excellent reputation in Cambodia. At the same time, thousands of Australian students have participated in work or study programs in Cambodia. A strong opportunity exists for Australian education providers to offer educational pathways to upskill a broader proportion of the Cambodian workforce in key areas such as IT, tourism, agriculture, entrepreneurship and healthcare. The Cambodian Government has stated its aim to improve the quality and capacity of its educational institutions by working with the private sector to expand technical and vocational training at the secondary level. Having improved their corporate governance and teaching quality, Cambodian universities are increasingly open to partnerships with foreign partners. The government has published a plan to give higher education institutions greater autonomy, which would expand the curricula that foreign providers can offer. A growing number of Australian education providers are also offering pathways, joint degree and technical and vocational training in Cambodia.

Food and agribusiness

Cambodia’s food and agribusiness market is forecast to grow by 6.4 per cent year-on-year to 2027. An uptick in food and beverage retail and hospitality markets is being driven by rising incomes, greater demand for protein and premium foods, demographic changes and increased tourism. The Cambodian Government has identified rural development as a priority area, presenting an opportunity for Australian agriculture, agro-processing, and agtech businesses to increase productivity, mechanisation and support the development of cold chain logistics and downstream processing in the country. Austrade has identified dairy, grains, pulses and feed, meat and livestock, and packaged foods as opportunities for Australian businesses.

Health and medical

Cambodia operates 132 public hospitals and 1,288 health centres, but demand for healthcare is outstripping supply. In 2021, 83.4 per cent of Cambodian households sought care in the private system, up from 76.5 per cent in 2009. Local and international private health providers are investing in and operating new private hospitals and clinics to meet rising demand. Alongside this, high income earners also regularly seek healthcare overseas, creating opportunities for high quality healthcare providers and trainers of healthcare professionals to enter the market. The majority of healthcare expenses are paid out-of-pocket, though demand for health insurance is growing among the middle class. The number of pharmacies is increasing in line with consumer demand for complementary medicines, health supplements and wellness products. Businesses should be aware that importing healthcare products into Cambodia typically requires a license from the Ministry of Health.

Green economy

Cambodia has set a target to be net-zero by 2050. Due to inadequate infrastructure development in power generation and transmission, achieving this will require significant public and private investment. The Cambodian government aims to shift 70 per cent of the country’s power from oil and coal to renewable sources by 2030. In 2024, the Cambodian government capped the price of solar energy to remain competitive with existing grid power and to encourage its use. Austrade has identified renewable energy solutions, including solar and wind generation and ancillary services, as an opportunity for Australian businesses, including through partnership with Cambodian companies. Foreign investment in this sector can be made independently or through government partnerships. There are also opportunities for institutional investors in the sector.

Infrastructure, transportation and cities

Cambodia’s infrastructure has historically suffered from inadequate investment. Since 2018, however, the government has invested in transportation and regional connectivity to support a growing urban population. The country aims to improve connectivity with its neighbours, providing Australian businesses with an opportunity to assist in improving cross-border transportation and logistics infrastructure. While there is political support for infrastructure development and project costs are relatively low, competition is high due to a significant Chinese presence in the market. Austrade has identified roads, rail, ports and logistics and airport solutions as opportunities for Australian businesses.

Mining

Cambodia has untapped reserves of gold, iron, copper, and bauxite. The Cambodian Government’s National Policy on Mineral Resources, in alignment with the ASEAN Minerals Cooperation Action Plan IV, aims to develop these mineral resources into a viable mining industry, with a focus on the critical minerals needed for the energy transition. Australian companies already have a strong reputation in this sector in Cambodia. The existing reserves and favourable policy settings present a strategic opportunity for Australian businesses. Cambodia liberalised foreign investment across most sectors in 2021. This allows foreign entities to own 100% of their business operations, including those in the mining industry. This makes Cambodia’s mining industry an attractive destination for early investment by Australian businesses. There are also opportunities for mining equipment, technology and service providers to enter the market.

Tourism

Inbound tourism has been an important driver of Cambodia’s economic growth. Tourism numbers remain strong, with over 4.5 million tourists visiting Cambodia in 2025. Domestic tourism has seen consistent growth, protecting the tourism economy against international headwinds, and notably a sharp downturn in Thai visitors amidst ongoing boarder tensions between the two countries. Despite this, there remains room for significant growth, dependant on the normalisation of bilateral relations between Cambodia and its neighbour countries . There are opportunities for Australian businesses to upgrade and expand tourism infrastructure, develop hotels and resorts, offer eco-and cultural tourism experiences and provide hospitality training to local workers.

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