Abstract
SCB EIC anticipates a slight slowdown in CLMV economies by 2025 due to global economic slowdown and impacts of Trump 2.0 policies. Despite this, domestic demand is expected to improve, driven by rising employment. Resilient growth in ASEAN economies will support tourism sector expansion in CLMV. Vietnam is projected to achieve the strongest growth, followed by Cambodia, while Lao PDR and Myanmar face challenges. Downside risks include US economic policy uncertainty, currency depreciation, NPLs, and climate change. Trade and investment between Thailand and CLMV are expected to grow gradually in 2025.
Summary
SCB EIC Forecasts on CLMV Economies in 2025
SCB EIC predicts a slight slowdown in the CLMV economies in 2025, in line with the global economic decline. This is attributed to the impact of Trump 2.0 policies, such as higher US tariffs leading to an influx of Chinese goods in CLMV markets. Central banks are also expected to decrease policy rates less due to rising inflation. Heightened uncertainties in global economic policies further dampen growth prospects.
Growth Prospects of CLMV Economies in 2025
In 2025, SCB EIC projects Cambodia’s economy to grow by 6.0%, Lao PDR by 4.3%, Myanmar by 2.2%, and Vietnam by 6.5%. Vietnam is expected to have the strongest growth, benefiting from production base relocation to ASEAN. Cambodia is likely to be the second-best performer, while Lao PDR remains vulnerable, and Myanmar’s growth is expected to remain subdued.
Downside Risks and Opportunities for Thai Businesses
CLMV economies face downside risks from US economic policies, exchange rate pressures, NPLs in banks, and climate change. Despite this, trade and investment between Thailand and CLMV are expected to grow gradually in 2025. Thai direct investment in the region is anticipated to increase due to improving business environments and lower interest rates. SCB EIC sees the CLMV region as offering significant growth potential and opportunities for Thai businesses to expand and diversify production bases.
