Abstract
SCB EIC forecasts a slowdown in CLMV economies to 5.1% growth in 2025, down from 6.3% in 2024, primarily due to elevated U.S. tariffs and global trade uncertainties affecting export reliance, particularly in Vietnam and Cambodia. Individual challenges, such as political instability in Myanmar and debt issues in Lao PDR, further strain the region’s outlook. While Vietnam shows resilience due to strong supply chains and reforms, Cambodia, Lao PDR, and Myanmar face significant domestic pressures impacting consumption and investment. Thailand’s trade with CLMV is expected to weaken amid regional instability.
Summary
Projected Economic Slowdown in CLMV
SCB EIC anticipates a growth deceleration in CLMV economies, projecting a drop to 5.1% in 2025, down from 6.3% in 2024. This slowdown reflects global economic trends and the adverse effects of elevated U.S. tariffs, particularly impacting countries like Vietnam and Cambodia. These nations, heavily reliant on exports, are further challenged by the influx of cheap Chinese imports.
Unique Challenges for Each Nation
Country-specific challenges complicate the economic landscape. Myanmar faces persistent political instability and recent natural disasters, resulting in a projected contraction. Meanwhile, Cambodia grapples with border tensions and high U.S. tariffs, which may dampen business confidence. In contrast, Vietnam is expected to perform relatively well due to its robust manufacturing base and favorable reforms.
Thailand’s Trade Relations with CLMV
Trade flows between Thailand and CLMV are expected to soften due to declining regional demand and heightened political risks. Ongoing tensions, particularly between Thailand and Cambodia, could exacerbate the situation. Despite these challenges, Thailand’s investments in CLMV have rebounded, particularly in finance and manufacturing, although investor sentiment remains cautious amid political uncertainties.
Source : SCB EIC expects CLMV outlook to face diverging risks amid global trade headwinds
