Oil prices surged and Asian stocks declined on March 2 after U.S.-Israeli strikes on Iran heightened fears of a prolonged conflict in the Middle East. (AFP)
On March 3, Cambodian business leaders voiced concern over the escalating conflict involving the US, Israel, and Iran, warning of potential economic spillovers. Anthony Galliano, Group CEO of Cambodian Investment Management Holdings, said a prolonged crisis could disrupt manufacturing, tourism, real estate, and banking, particularly if energy flows through the Strait of Hormuz are affected. While oil prices have risen by about 7% so far, he cautioned that extended instability would weaken growth and increase non-performing loans.
Thong Mengdavid, Deputy Director at the China-ASEAN Studies Centre of CamTech University, warned that higher oil prices and disrupted trade routes could push up logistics and production costs, while capital flows may become more volatile. Chey Tech, a socio-economic researcher, highlighted the risks of broader regional escalation, and Vichet Lor, Vice President of the Cambodia-Chinese Commerce Association (CCCA), noted that foreign investors may adopt a “wait-and-see” approach, potentially affecting GDP projections.
Cambodian firms should prepare for higher fuel and freight costs, supply chain disruptions, and more volatile capital flows. Companies in the export, tourism, and property sectors may face slower growth, while banks could see rising credit risks. Strengthening cost management, diversifying markets, and maintaining financial resilience will be critical if the conflict persists.
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