CLMV economic growth to accelerate in 2024.
SCB EIC expects CLMV economic growth to accelerate in 2024, backed by a recovery in exports and tourism, which will bolster domestic demand through labor market recovery. Looking ahead, CLMV economies are poised to benefit from the “China +1” strategy, with multinational enterprises seeking to diversify their manufacturing bases to mitigate rising geopolitical risks. This relocation trend will help buttress foreign direct investment (FDI) in CLMV countries in the medium term. In 2024, SCB EIC anticipates GDP growth of 6.0% in Cambodia (up from 5.6% in 2023), 4.7% in Lao PDR (from 4.5%), 3.0% in Myanmar (from 2.5%), and 6.3% in Vietnam (from 5.1%).
The growth rate of each CLMV economy still lagged behind the pre-COVID-19 average. Slower growth is primarily attributed to pressures from China’s economic deceleration, given CLMV’s heavy reliance on China—especially in trade, investment, tourism, and the real estate sector. Meanwhile, Cambodia and Vietnam witnessed an uptick in non-performing loan ratios following the withdrawal of COVID-19 relief measures. Furthermore, tighter domestic financial conditions may hinder credit from financial institutions and access to liquidity for businesses. Geopolitical conflicts also pose significant risks that warrant monitoring. In the short term, disruptions in the Red Sea and a drought in the Panama Canal could hamper global trade and heighten costs in export logistics for CLMV countries. In the long term, the CLMV region must prepare for the rising tides of protectionism worldwide, notably trade barriers and tariffs.
read more : https://www.scbeic.com/en/detail/product/clmv-outlook-mar24