Abstract
SCB EIC predicts that economic growth in CLMV countries (Cambodia, Laos, Myanmar, and Vietnam) will accelerate in 2024 due to a recovery in exports and tourism, as well as the “China +1” strategy boosting FDI. Despite this, each country’s growth rate still lags behind pre-COVID levels. Lao PDR faces risks from high public debt, while Myanmar struggles with political unrest and structural challenges. CLMV currencies may face softer pressures in 2024, and trade and investment with Thailand are expected to improve. Overall, the long-term outlook for the CLMV economies remains positive.
Summary
CLMV Economic Growth Outlook for 2024
SCB EIC predicts that economic growth in Cambodia, Lao PDR, Myanmar, and Vietnam (CLMV) will accelerate in 2024 due to a recovery in exports and tourism. The “China +1” strategy is expected to drive multinational enterprises to diversify their manufacturing bases in CLMV countries, boosting foreign direct investment. Despite the growth, CLMV countries still face challenges such as slowdowns in China’s economy and geopolitical conflicts that could hinder growth in the long term.
Varying Economic Recovery Across Countries
Lao PDR is facing risks from high public debt and depleting foreign reserves, while Myanmar continues to struggle with political unrest and Western sanctions. To address these challenges, both countries are undertaking fiscal adjustments and seeking new sources of funding. CLMV countries may see softer downward pressures on their local currencies in 2024, but country-specific challenges could still lead to depreciation in some currencies.
CLMV-Thailand Trade and Investment Outlook
In 2024, trade and investment between CLMV countries and Thailand are expected to recover with improvements in global trade and easing financial conditions. Despite economic instability in some CLMV nations, there is a positive outlook for long-term growth with CLMV remaining an attractive region for both Thai and foreign investors due to its young workforce, free trade agreements, and strategic location.
