(Khmer Times News): The Royal Government revised its economic growth forecast for 2026 to 4.2 percent, down from 5.0 percent projected last week, and unveiled the Medium Term Fiscal Framework (MTFF) 2027-2029 to guide fiscal policy, amid heightened global uncertainty and rising domestic spending pressures.
Approved by Prime Minister Hun Manet on April 28, the MTFF 2027-2029 was announced to the public on Monday. It aims to safeguard sovereignty and territorial integrity while maintaining livelihoods and promoting medium-term growth under global and regional uncertainty.
Mr Hun Manet said the framework provides a medium-term vision for macroeconomic and public finance management, outlining government policy priorities and principles for the efficient and effective use of national resources, besides strengthening long-term fiscal sustainability.
It also strengthens the linkage between policies, strategic plans and annual budgeting, ensuring resources are allocated in line with national development priorities and enhancing the government’s ability to respond to emerging challenges in a timely and effective manner.
The Prime Minister explained that Cambodia, like others across the world and in the region, is in a multi-crisis transition period marked by high uncertainty due to rising protectionism, trade tensions, geopolitical competition and worsening climate change impacts.
He highlighted that Cambodia has, in recent years, been undergoing a transition amid overlapping global shocks, reflecting vulnerabilities in trade, energy and climate systems that continue to pressure economic resilience and domestic policy adjustments.
Mr Hun Manet noted that in the past two years, Cambodia has faced three major shocks, including US retaliatory tariffs, Cambodia-Thailand border tensions and the Middle East war, which triggered an energy crisis with broad economic spillovers.
He said that the ongoing Middle East conflict has driven sharp increases in oil and gas prices, creating inflationary pressures and affecting the country’s economic growth trajectory and overall stability in both the short and medium term.
“In this new context, Cambodia’s economic growth outlook has been revised to 4.2 percent for 2026 and 5.0 percent for 2027, with an average of 5.5 percent for 2028 and 2029 respectively,” the Prime Minister said.
He added that public finances face medium-term shocks, as the revenue base is affected by successive fiscal measures on fuel products and incentives encouraging electricity use instead of fossil fuels across multiple sectors of the economy.
On the expenditure side, requirements are rising for protecting national sovereignty, improving livelihood, ensuring crisis-resilient growth and infrastructure development and preparing for upcoming commune council elections, he noted.
Mr Hun Manet highlighted that the framework outlines seven key policy priorities guiding fiscal management and development planning in the medium term, including national security, social welfare, diversification, private sector growth, human capital, digital transformation and institutional reform.
Source: https://www.khmertimeskh.com
