Mekong Strategic Capital

21/08/2026

A sneak peak at one of the charts in our economic update coming out next week. It really highlights the two-speed economy we're seeing at the moment - very strong Industry growth, offset by very weak Services.

For Industry, is basically growing in line with , and we expect that strong growth to continue into next year given the strong FDI flows we're seeing.

Services is another matter, and that is where we see the impact of falling tourism, the scam centre cost, and the NPL problem which is holding back growth in the Financial and Real Estate Activities category. The good news is that we expect these negatives to start unwinding in 2027.

08/05/2026

Pre-covid, Tourism was one of the key drivers of Cambodia's GDP, representing around 10% of GDP, and a major source of employment.

And that wasn't surprising - Cambodia has some of the most amazing tourist attractions in the world, including the remarkable Angkor complex (ranked #2 by TripAdvisor in list of most attractive destinations in Asia), great beaches (Koh Rong beach ranked #9 in the world by Top50 Beaches), a wonderful culture, a vibrant dining scene, and great nature experiences.

Since then, something has gone very wrong. Visitors to Angkor, which provides a good proxy for what is happening with international tourists, in April 2026 were down 72% on April 2019. Next door, visitors to Vietnam were up 36% (our focus is on the change, not on the absolute numbers).

Asian tourists have stopped visiting, dropping from around two-thirds of visitors to Angkor, to now being less than a third. To illustrate, South Korean tourists to Angkor are down 96%, while Malaysian tourists were down 87%, even though there are still direct flights from KL.

While the border conflict between Cambodia & Thailand hasn't helped, these declines were largely in place before that conflict started last year, due to the reputational impact of Chinese criminal gangs operating scam centres in Cambodia. The current crackdown is well overdue, but welcome.

10/04/2026

We've updated our outlook for 2026 to reflect the impact of the Gulf conflict. In a nutshell, we've gone from expecting 4% GDP growth in 2026 (with risks to the UPSIDE), to now somewhere between 2%-3% growth, with DOWNSIDE risk if the conflict isn't resolved in a sensible and timely manner. Given the parties involved, we don't have a high level of confidence this will happen.

We're particularly concerned about the impact on tourism, which was already incredibly weak, and also agri given the timing (wet season rice planting)

While the Cambodian Government has managed this crisis well so far, including by building up reserves, a lot more is going to need to be done before this crisis is over. Cautious, piecemeal measures will not be enough, and a holistic whole of government response is going to be needed.

One positive we do want to highlight is how much Cambodia has transformed its electricity supply, which just 20 years ago was 98% oil based, compared to just ~2% now - quite a remarkable transformation, and we would be in a far worse position today if that transformation hadn't occurred.

We've updated our outlook for 2026 to reflect the impact of the Gulf conflict. In a nutshell, we've gone from expecting 4% GDP growth in 2026 (with risks to the UPSIDE), to now somewhere between 2%-3% growth, with DOWNSIDE risk if the conflict isn't resolved in a sensible and timely manner. Given th...

04/03/2026

MSC's Stephen Higgins spoke with Cambodia Investment Review about MSC's investments into the Cambodia Securities Exchange, and what is needed to make the CSX a more vibrant market.

In the interview, he shared MSC's thinking on where we see genuine value (Acleda, PPAP, PAS, PWSA), where we don't (read the article....), and why IPO pricing discipline and domestic institutional participation are the two issues that will determine when the CSX reaches its potential.

Cambodia has listed companies trading at very cheap multiples, delivering remarkably high revenue growth, and with sustainable business models. That combination just doesn't exist in developed markets.

The fundamentals are there. The structural challenges are fixable. The question is how quickly can issuers, regulators, and domestic institutions — particularly NSSF — move to support the growth of the CSX.

https://cambodiainvestmentreview.com/2026/03/04/cambodia-leadership-review-50-international-voices-2026-stephen-higgins-managing-partner-of-mekong-strategic-capital/

24/01/2026

We have launched a Telegram channel to share selected research and market commentary from Mekong Strategic Capital.

The channel will be used to distribute short-form analysis, data-driven views, and occasional longer research pieces focused on Cambodia and Southeast Asia.

It is intended as a low-noise research feed rather than a discussion forum.

You can follow the channel here https://t.me/MSC_Research or via the QR code below.

10/12/2025

's Q3 public debt statistics are out, and continue to reflect Cambodia's very conservative approach to public debt management. Key points:

- Public debt actually fell slightly in Q3 to US$12,620m. The present value of debt is just 18.8% of GDP, and the average interest rate on this debt is only 1.15% (this is why we strongly encourage the government to borrow a lot more to invest in infrastructure before 2029, while concessional terms are still available)

- New loans signed in Q3 were just $100m ($50m from Korea, $50m from ADB). For year to date, new loans signed of just $298m, compared to $1,075m for same period 2024

- There have been no new loans signed with China since 2023 (forget MOUs, nebulous statements etc - the debt statistics record actual loans signed). Debt to China is now just 32% of Cambodia's total debt, down from 40% at end of 2022.

03/12/2025

Cambodia’s economy is increasingly two-speed, with plenty of mixed signals. But overall we're slightly more optimistic than we were 3 months ago, and now expect around 4% GDP growth for this year and next.

For many households and domestic oriented businesses, conditions feel tough. The reputational impact of scam centres, and the conflict on the Thai border, are likely to knock more than 3 percent off GDP over the next year, including through weaker remittances, tourism and local demand. Property is also a significant drag, with a large overhang of unsold stock and around one in six borrowers in arrears or restructured.

At the same time, there are some surprising areas of strength. VAT and excise collections are up 23%, and vehicle imports are up 50%, indicating strength in consumer spending. Machinery imports are well up (reflecting ongoing investment in manufacturing), and exports are all holding up better than expected. That points to resilient consumption and ongoing growth in parts of manufacturing and services, even as stress is building elsewhere in the system.

The Royal Government of Cambodia also still has significant fiscal space, and could offset some of these headwinds through targeted stimulus and structural reforms.

If you are interested in where Cambodia’s economy is really heading, the full Mekong Strategic Capital slide deck is here. Happy to discuss any of the numbers or implications for investors, banks or policymakers.

Now that we have a robust and hopefully enduring ceasefire between Cambodia and Thailand, Mekong Strategic Capital considers the economic impact of the conflict, as well as the "final" tariff outcome.

10/10/2025

September trade statistics for were released today, and they tell an encouraging story.

The standout trend, and it’s a major positive, is the continued industrialisation of the economy.

- Imports of mechanical equipment are up 52% year-to-date,
- Imports of Electrical machinery and goods are up 42%, and
- Imports of Iron, steel, and articles thereof are up a combined 59%.

These are remarkable figures, reflecting both rising investment and deepening manufacturing capacity. They reinforce our long-term confidence in Cambodia’s economic trajectory, even as we expect short-term softness over the next 12 months.

Other key points:

- We’re beginning to see the unwind of this year’s tariff distortions. Exports (excluding gold) fell 2.5% in September but remain up 13% year-to-date. Garment exports were up only 2% for the month, yet 19% higher over the year.
- Imports rose 20% in September and 17% year-to-date, widening the trade deficit. However, this increase is driven largely by capital equipment, not consumption - a long-term positive signal.

03/09/2025

The IMF today issued their press release on their 2025 Article IV Mission to . They have reduced their expectations for 2025 GDP growth to 4.75%, and stated that "the outlook is subject to considerable downside risks."

In their release for 2024, they noted that "risks to the outlook have shifted to the downside" which is a lot softer than the wording this year. The inclusion in this release of the word "considerable" is....considerable!

Our expectation of 3% growth for 2025 assumes that these considerable downside risks do come to fruition, so we don't see our view as being materially at odds with the IMF. Overall we concur with their analysis and policy prescriptions, but believe the RGC should be more aggressive in terms of fiscal stimulus.

01/09/2025

One of the challenges that Cambodia faces is overcoming outdated and incorrect perceptions. For those who haven't been in the country for 20 years, or not at all, Cambodia today is very different from what most people expect.

As part of a recent investment and trade promotion visit to Australia, Cambodia's CDC, supported by Australia's CAPRED program, developed a promotional video highlighting some of the opportunities in Cambodia today.

For investors, it's time to take a fresh look!