Is Cambodia getting pricier? New data shows cost of living rise

Fresh numbers from the Penn World Table show that Cambodia is losing its edge as an ultra-cheap destination.

Cambodia appears to be becoming comparatively more expensive, not only against the United States but also against several of its main Southeast Asian competitors.

An analysis published by Cambodianess on 21 August highlighted new Penn World Table (PWT) figures showing Cambodia’s household consumption price level (CPL) rising from about 0.32 in 2015 to 0.45 in 2023. The article interpreted this as Cambodia moving from roughly 32% to 45% of US prices. The underlying trend is real, but the comparison needs to be qualified in that PWT’s CPL measure is expressed relative to the price level of US output-side GDP in 2021, rather than setting US household prices at exactly 100 in every year.

Comparing each country's household consumption price level directly with the US figure for the same year gives a clearer picture. On that basis, Cambodia was about 37.5% of the US household price level in 2015 and 42.0% in 2023: Cambodia becoming materially more expensive relative to America.

More striking is what has happened relative to neighbouring economies. In 2023, Cambodia's PWT household price level was equivalent to approximately 42.0% of the US level, compared with 37.4% for the Philippines, 29.9% for Vietnam and 29.2% for Thailand. But in 2015, Cambodia stood at about 37.5%, against 41.6% for the Philippines, 36.2% for Thailand and 34.1% for Vietnam. Cambodia has therefore moved from being cheaper than the Philippines and only marginally more expensive than Thailand and Vietnam to being the most expensive of the four countries on this particular PWT measure.

The gap with Europe nevertheless remains substantial. The 2023 PWT price level for Cambodia was 0.448, compared with 1.012 for the UK, 0.904 for France, 0.896 for Germany and 0.799 for Spain. That puts Cambodian household prices at roughly 44% of UK levels, 50% of French and German levels and 56% of Spanish levels. Cambodia is consequently still inexpensive by Western European standards, even though the advantage is narrowing over other regional economies.

It is important to note, however, that The Penn World Table is not a conventional cost-of-living index such as a consumer price index. Its price levels are constructed from purchasing-power-parity estimates, national accounts data and exchange rates to permit international comparisons.

Indeed, Cambodia's average domestic inflation was only 2.1% in 2023, according to the IMF, followed by an estimated 0.9% in 2024. This reinforces the distinction between ordinary inflation and a change in a country's international comparative price level.

More current evidence nevertheless supports the broader conclusion that Cambodia is no longer automatically the cheapest option among its regional peers. Numbeo's 2026 Southeast Asia comparison gives Cambodia a cost-of-living index of 34.76, above the Philippines at 30.13 and Vietnam at 26.45, although still below Thailand at 37.99. Cambodia's restaurant-price index of 25.37 is even fractionally higher than Thailand's 25.00, while its grocery index of 41.59 considerably exceeds Vietnam's 31.82 and the Philippines' 35.44. Numbeo is crowdsourced rather than an official statistical database, but its figures broadly reinforce the change indicated by PWT.

The reasons are structural as well as inflationary. Cambodia imports a large proportion of consumer goods and energy, while widespread use of the US dollar means many internationally traded goods and services are priced directly or indirectly against a relatively strong global currency. At the same time, development, rising wages in parts of the economy and increasing demand for higher-quality housing, restaurants, healthcare and imported products can push the cost structure of cities such as Phnom Penh and Siem Reap towards that of more developed regional markets. The World Bank notes more generally that price levels tend to rise as countries develop because households consume more services, whose costs increase alongside wages.

There may be further upward pressure in 2026. The IMF said in July that Cambodian inflation had risen sharply and projected an average rate of 5.6% for 2026, largely reflecting higher energy prices, although it also described the riel as broadly stable.

The overall conclusion is therefore qualified but increasingly clear. Cambodia remains substantially cheaper than the US and Western Europe, but its cost advantage within Southeast Asia has eroded. Penn World Table data suggest that Cambodia has become more expensive relative to the US while Thailand and Vietnam have become cheaper on the same relative measure, and the Philippines has also lost ground against US prices. More recent cost-of-living data paint a slightly different picture, with Thailand remaining somewhat more expensive overall, but Cambodia now clearly costing more than Vietnam and the Philippines.

For tourists, expatriates and internationally mobile retirees, Cambodia can still offer considerably lower living costs than Europe or North America. Its position as a cheap alternative to neighbouring Southeast Asian countries, however, is becoming much harder to sustain.