Cambodia's economy is recovering, but annual growth will not return to the highs of around 10% seen in the years preceding the 2008-09 global recession. Although the government has conceded that growth slowed in 2009, Hun Sen has said that the economy avoided a contraction in the year as a whole, expanding by 0.1%. This claim is contradicted by the double-digit declines recorded in 2009 in merchandise exports and approved investment, among other indicators. We estimate real GDP growth in 2010 at just 4.1% a year. The economy is forecast to expand by 5.1% in 2011 and by 6.3% in 2012. The garment sector remains particularly exposed to the US economy, which is Cambodia's main export market, accounting for almost one-half of its export earnings. Garment sector-led economic growth will remain fragile, with global growth expected to slow again in 2011, but garment shipments to Europe may improve following a recent change to the Everything But Arms initiative, a 2001 agreement that provides the world's least developed countries with duty- and quota-free access to the EU's 27 member states. We estimate that growth in construction resumed in 2010, but at least two major property projects in Phnom Penh have been suspended recently, suggesting that the sector is some way from returning to pre-crisis levels of activity. Agriculture will become an increasingly important source of growth, while the tourism sector will attract more visitors in the forecast period.