Is life getting more expensive in Cambodia? After two years of slow price rises, a fuel shock in 2026 pushed inflation up quickly, while incomes grew slowly. By our estimate, the garment minimum wage now buys about 4% less than in 2024.
What happened
Inflation is the speed at which prices rise. For two years, prices in Cambodia rose only slowly. Average inflation was 0.8% in 2024 and 2.5% in 2025 (Asian Development Bank, April 2026).
Then conflict in the Middle East pushed up world oil prices. Early this year, fuel was about 12% of everything Cambodia imports (World Bank, June 2026). In March 2026, gasoline at the pump rose about 45% in one month. Diesel rose more than 70%. The World Bank calls it the largest one-month rise since 2008 (World Bank, June 2026).
In March, transport cost 12.9% more than a year before, and food 5.7% more. Overall inflation was 5.6% in March and 5.8% in April (World Bank, citing the National Institute of Statistics). By August, the latest month, it eased to 4.8% (National Institute of Statistics, August 2026).
From 21 September 2026, regular gasoline costs 5,250 riel a litre and diesel 6,100 riel. That is about 36% and 58% above the prices before the conflict (Ministry of Commerce, via Xinhua). For the whole of 2026, the Asian Development Bank (ADB) forecasts inflation of 4.7% (ADB, September 2026).
Why does it hurt families?
In 2023, food and non-alcoholic drinks took 49.7% of household spending (National Institute of Statistics, Cambodia Socio-Economic Survey 2023). That is about half of every riel a family spends. So when food and transport rise together, there is little room left.
A second source of income became weaker. In 2025, nearly 1 million migrant workers came home from Thailand. Remittances, the money Cambodians abroad send home, fell to 3.6% of GDP in 2025. That is down from an average of 6% in 2019–2024 (World Bank, June 2026). GDP is the total value of everything the country produces. For many families, a second income shrank as prices rose.
The latest official poverty rate is 17.8% (World Bank and Royal Government of Cambodia). But that figure is from 2019/20. It is more than six years old.
Who is involved
- The National Council on Minimum Wage brings together government, employers and unions. Each year it discusses the minimum wage for garment, footwear and travel-goods workers. It was $204 a month in 2024 and $210 in 2026 (Open Development Cambodia; Cambodianess).
- The government set the 2027 wage at $212 on 30 September 2026, starting 1 January 2027. Employers had proposed $210 and unions $225. With allowances, basic pay is about $229 to $240 a month (AKP, 30 September 2026).
- The Ministry of Economy and Finance cut VAT, a tax added to the price of goods, on regular fuel from 10% to 4% from 20 March 2026 (Instruction No. 003).
Risks and open questions
The first risk is debt. In 2023, 33.8% of households carried a debt (National Institute of Statistics, 2023). That is about one household in three.
A non-performing loan is one that is not being repaid on time. At the end of 2025, 8.3% of loans at banks and deposit-taking lenders were non-performing (National Bank of Cambodia, Financial Stability Review 2025). Among members of the Cambodia Microfinance Association, 11.2% of loans were more than 30 days late in Q1 2026 (Cambodia Microfinance Association).
The second risk is the future. The ADB forecasts that inflation will ease to 2.8% in 2027 (ADB, September 2026). But that depends on oil prices. And with no poverty figure newer than 2019/20, it is hard to know how many families are poor today.
What it means for you
From 2024 to 2026, the minimum wage rose about 2.9%. Prices rose about 7.3% (ADB, April and September 2026). This combines 2.5% actual inflation in 2025 with the ADB's 4.7% forecast for 2026, compounded. So, by our estimate, the minimum wage now buys about 4% less. This is our estimate, not an official figure.
Picture a moto driver who uses 2 litres of gasoline a day. By our estimate, the driver pays about 2,800 riel more each day than before the conflict. That is roughly $20 a month.
In a World Bank simulation, fuel prices rise 60%. Then about 1.1 million people could fall into poverty. The poorest tenth of households would lose about 8% of what they consume (World Bank, June 2026). This is a model, not a count.
Different views
How high will inflation go in 2026? Forecasts differ, partly because they were made at different times.
- In July 2026, AMRO, a regional research office, forecast 5.1% (AMRO, via Cambodia Investment Review).
- In July 2026, IMF staff forecast 5.6% (IMF, 8 July 2026).
- In September 2026, the ADB forecast 4.7%.
Was the 2027 minimum wage enough?
- Unions and 125 civil society groups wanted more. Their own studies say pay covers only about 60% of household spending (CamboJA News, 19 September 2026).
- The Labour Minister spoke of "difficulties in raising wages." He pointed to global uncertainty, the energy crisis, and lower wages in some countries in the region (CamboJA News).
- The government said it considered "the livelihoods of workers and employees" (AKP).
Is microfinance debt a risk?
- Human Rights Watch reported over-indebtedness among Indigenous borrowers, including forced land sales (Human Rights Watch, September 2025). Several lenders it named denied aggressive practices.
- The Cambodia Microfinance Association calls the sector "highly resilient" (Q1 2026).
How should a government help?
- Cambodia chose a broad fuel tax cut. The government says it aims to ease the impact of world oil prices and reduce living costs (Ministry of Economy and Finance).
- The World Bank prefers "targeted, time-bound cash transfers to vulnerable households." It says this protects the poorest at lower cost (World Bank, June 2026).
About the data
- Inflation and fuel prices are from 2026. Household data is from a 2023 survey. The poverty rate is from 2019/20.
- 4.7% (2026) and 2.8% (2027) are ADB forecasts. The AMRO and IMF figures are separate forecasts, made at different times.
- The buying-power and moto figures are our own estimates. The first uses a 2026 forecast. The 1.1 million figure is a simulation.
- The $212 wage for 2027 is approved and starts on 1 January 2027. The fuel VAT cut is approved policy.
- Monthly inflation and yearly averages come from different series. The 8.3% and 11.2% loan figures use different measures and cannot be compared.
