Cambodia Investment Review
Cambodia’s Cabinet has approved a draft 2027 budget of 47.66 trillion riel, or approximately US$11.7 billion, prioritising national defence, household livelihoods and targeted economic growth amid heightened uncertainty.
The draft Law on Budget Management, approved at an October 23 meeting chaired by Prime Minister Hun Manet, forecasts economic growth of 4.8% in 2027, up from approximately 4% expected in 2026.
The spending plan now heads to Parliament for deliberation and adoption before being submitted to King Norodom Sihamoni for promulgation.
Revenue Growth Expected to Outpace National Spending
National budget revenue is projected to reach 32.33 trillion riel, approximately US$7.9 billion, in 2027. That represents a 6.7% increase from the 2026 budget and is equivalent to 13.49% of gross domestic product.
National-level expenditure is targeted at 39.7 trillion riel, approximately US$9.7 billion, up 3.2% from the 2026 budget law and equivalent to 16.57% of GDP.
While revenue is forecast to grow faster than national-level spending, projected expenditure remains above revenue, highlighting the government’s challenge of meeting policy commitments while maintaining sustainable public finances.
According to the Cabinet readout, the budget aims to safeguard sovereignty and territorial integrity, maintain stable livelihoods and support targeted growth while preserving the government’s capacity to respond to uncertainty.
The draft also prioritises funding for key government policies and specific reform measures scheduled for implementation in 2027.
Manufacturing and Services to Support Growth
Cambodia’s growth outlook rests on contributions from industry, services and agriculture, according to the draft law.
Industrial activity is expected to be supported by garment and non-garment manufacturing, alongside food, beverage and tobacco production.
Within services, the government identified hospitality and food services, wholesale and retail trade, transport and storage, and information and communication technology as growth drivers.
Agricultural contributions are expected to come from crop production, livestock and fisheries.
GDP per capita is forecast to rise to US$3,277 in 2027 from approximately US$3,098 in 2026, an increase of about 5.8%. The measure reflects average economic output per person rather than household earnings.
Local Administration Funding Includes Education and Health
Sub-national administrations are expected to generate revenue of 2.82 trillion riel, approximately US$691 million, equivalent to 1.18% of GDP.
Their initial expenditure allocation is projected at 5.07 trillion riel, approximately US$1.24 billion, or 2.12% of GDP.
That allocation excludes additional funding for capital and provincial health and education departments tied to the conditional delegation of government functions. Those funds are to be transferred following approval of the 2027 budget.
Including these allocations, the total budget for sub-national administrations is expected to reach 7.96 trillion riel, approximately US$1.95 billion, equivalent to 3.32% of GDP.
Parliamentary Review Ahead
The Cabinet’s approval advances the government’s spending framework, but the draft still requires parliamentary adoption and royal promulgation.
The proposed budget sets out a balance between stronger defence capacity, support for livelihoods and economic expansion, with fiscal sustainability remaining an explicit priority as Cambodia prepares for another year of uncertain conditions.
