Economic Impact of the Cambodia-Thai Border Conflict

Now that we have a robust and hopefully enduring ceasefire between Cambodia and Thailand, it's time to start considering the economic impact of the conflict, as well as the "final" tariff outcome.

Our report is focused on Cambodia, but we also take a brief look at implications for Thailand. We encourage you to read the full report, but in summary:

• US tariffs now expected to have minimal impact on Cambodia’s GDP (direct impact <1% over three years).

• Thai Border conflict is likely to have a significantly larger short-term impact (>3% over next 12 months), leading to a reduction in our forecast to around 3% GDP for 2025, and a similar number in 2026.

• Main economic impacts:

  • Tourism

  • Remittances

  • Supply chain impacts (although manufacturing overall expected to be strong)

  • FDI

• The Royal Government of Cambodia (RGC) can partly offset these impacts through urgent and targeted fiscal stimulus, supported by additional reforms.

• Thailand faces a recession, given lower starting point for GDP growth (previous forecast ~2% for 2025).

> Download our full analysis:

Economic Impacts of Border Conflict.pdf

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