4 nations’ GDP to plunge

PHNOM PENH: The economies of Cambodia, Laos, Myanmar and Vietnam (CLMV) are facing severe growth pressure due to the Covid-19 pandemic.

The four nations’ gross domestic product (GDP) growth is forecast to slow sharply to three per cent this year, down from 6.9 per cent last year, before recovering to 6.5 per cent next year, reports

Vietnam News Agency, quoting a Maybank Kim Eng assessment.

The assessment said Cambodia would be worst hit with just 0.5 per cent growth, down from seven per cent the previous year.

This is due to high reliance on tourism, as tourism and transport-related sectors accounted for 12.3 per cent of its gross domestic product, and exports of textiles and garments, which have also been badly hit.

Cambodia has yet to impose nationwide lockdown measures, though a state of emergency bill was recently passed, which will allow the government to impose restrictions.

Vietnam is expected to do better than the rest with 3.6 per cent growth of its gross domestic product, thanks to a more diversified economic structure, and a healthier fiscal position and macro fundamentals, though that figure is still a sharp fall from a seven per cent growth the previous year.

The country also appears to have successfully brought the Covid-19 pandemic under control, and became the first country in Asean to start easing social distancing measures on April 23, with trade and retail businesses allowed to reopen, and public transport resuming.

In contrast, Myanmar is expected to see growth of two per cent this year, down from 6.8 per cent in the previous year.

The country is also highly reliant on tourism, with tourism and transport-related sectors accounting for up to 11.2 per cent of its gross domestic product — a figure which could be even larger if accommodation and food services are taken into account.

Myanmar is also most vulnerable to the collapse in manufacturing and export demand, with manufacturing accounting for 24.2 per cent of its GDP.

Laos may be more immune, with manufacturing accounting for just 7.5 per cent of its gross domestic product and tourism and transport, 3.9 per cent.

But its heavy reliance on electricity and gas instead (10.8 per cent) could hurt the economy as factories shut and travel slows.

Growth in Laos is predicted at 2.4 per cent this year, down from 4.7 per cent the previous year.