Illustrative image (Photo: businesstimes.com.sg)
Singapore (VNA) – The COVID-19 pandemic is puttingsevere growth pressure on the economies of Cambodia, Laos, Myanmar andVietnam (CLMV) and may cause the region's growth to slip to a historical low, accordingto a Maybank Kim Eng report.
CLMV’s GDP growth is forecast to slow sharply to 3 percentin 2020, down from 6.9 percent in 2019, before recovering to 6.5 percent in2021, the report said.
Vietnam is expected to do better than the rest with 3.6 percentgrowth, thanks to a more diversified economic structure, and a healthier fiscalposition and macro fundamentals, though that figure is still a sharp fall from7 percent growth last year.
Vietnam also appears to have successfully brought theCOVID-19 pandemic under control, and became the first country in ASEAN to starteasing social distancing measures on April 23, with trade and retail businessesallowed to reopen, and public transport resuming.
In contrast, Cambodia will be worst hit with just 0.5 percentgrowth, down from 7 percent in 2019. This is due to a high reliance on tourism,with tourism and transport-related sectors accounting for 12.3 percent of its GDP,and exports of textiles and garments.
Cambodia has yet to impose nationwide lockdown measures,though a state of emergency bill was recently passed, which will allow thegovernment to impose restrictions.
Myanmar is expected to see growth of 2 percent this year,down from 6.8 percent in the previous year. The country is highly reliant ontourism, with tourism and transport-related sectors accounting for up to 11.2 percentof its GDP – a figure which could be even larger if accommodation and food servicesare taken into account.
It is also most vulnerable to the collapse in manufacturingand export demand, with manufacturing accounting for 24.2 percent of GDP.
Laos may be more immune, with manufacturing accounting forjust 7.5 percent of GDP and tourism and transport, 3.9 percent. But its heavyreliance on electricity and gas instead (10.8 percent) could hurt the economyas factories shut and travel slows.
Growth in Laos is predicted at 2.4 percent in 2020, downfrom 4.7 percent last year./.
