This year’s economic activity has been slower than previously anticipated due to emerging structural bottlenecks and continued external headwinds. This has prompted a sense of urgency to address the rising economic challenges to sustain growth in the short to medium term. While Cambodia’s structural slowdown started well before the pandemic, it had been masked for several years by rapid capital inflows, mainly from China, fueling a construction boom until COVID-19 hit. The structural challenges are now exposed, hurtingeconomic activity, which is also being impacted by global headwinds. Despite a rapid expansion of public investment in physical infrastructure, shortcomings in Cambodia’s transportation network and logistics performance remain, and the country continues to face high costs and low reliability of energy supply. The country is ranked low among East Asian countries in terms of ease of doing business, investment climate, and competitiveness, due in part to its difficulties in promoting good governance.