Key facts
- A year-long border conflict between Cambodia and Thailand has led to the closure of key crossings.
- Bilateral trade, valued at approximately $4.7 billion annually, has been paralyzed.
- Over 780,000 Cambodian workers have returned from Thailand, creating a labor shortage.
- Cambodia faces a loss of over $3 billion USD in annual worker remittances.
- The conflict has caused significant disruptions to regional supply chains and tourism.
The Cambodian economy is suffering significantly due to a year-long border conflict with Thailand, which has led to the closure of vital crossing points and a halt in bilateral trade. Nget Nhean, who previously assisted migrant workers and traders at the Poipet border, is now unemployed as a result of the closure in June 2025.
The conflict has escalated beyond a territorial dispute into what is described as an "Economic, Political, and Geopolitical War," severely impacting both nations. The paralysis of trade at the Klong Luek–Poipet crossing, a crucial logistics hub, has stalled commerce valued at approximately $4.7 billion annually. Thailand's exports of consumer goods, fuel, and construction materials to Cambodia have been cut off, while Thailand's manufacturing sector has been affected by the loss of Cambodian raw materials like cassava and scrap metal.
Economic forecasts suggest that if the border remains shut for a full year, Thailand could lose around 66.61 billion baht in exports and 20.37 billion baht in imports, potentially contracting its GDP by 0.74% in 2026. Cambodia is facing a severe inflationary spiral and increased transportation costs, estimated at 25-40%, as companies reroute shipments through Vietnam and Laos.
The instability has also triggered a mass exodus of Cambodian migrant workers from Thailand, with over 780,000 returning home. This has created an acute labor shortage in Thailand's construction, fishing, and agriculture sectors and represents a loss of over $3 billion USD in annual worker remittances for Cambodia. Tourism along the border has also collapsed, with the area designated a "Conflict Zone."
New protocols implemented by the Royal Thai Army limit border crossings to essential activities and reduce operating hours. The Federation of Thai Industries estimates daily trade losses could reach 500 million baht. The Thai government has directed the Thai-Cambodian Joint Boundary Commission to convene to address the tensions, while Cambodia continues to advocate for a resolution through the International Court of Justice (ICJ).