The COVID-19 pandemic is having a negative impact on CLMV economies through their dependency on foreign-sourced revenue from tourism and exports says KResearchCenter.
While the COVID-19 crisis has caused the rate of economic growth in the CLMV bloc to be at its lowest in two decades, the CLMV economies could grow at 3.4 percent this year.
Overall, the CLMV economies will tend to undergo a speedy recovery over the next 1 to 2 years – with economic growth projected to reach 6.4 percent in 2021 and 6.5 percent in 2022.
Countries which are heavily dependent on foreign revenue are facing more negative effects during this crisis.
Cambodia is the most severely affected country
Cambodia is the most severely affected country, as it is extremely reliant on foreign income through tourism and exports. Tourism is expected to shrink by an estimated 60 percent this year. Meanwhile, in terms of exports, Cambodia remains most dependent on the EU and US markets. Both the United States and the EU bloc are currently most vulnerable to the spread of COVID-19.
Therefore, the value of exports for 2020 is projected to decline by 10 percent, which would result in a 0.9 percent contraction in Cambodia’s overall economy.
Vietnam’s economic growth rate is still expected to be at 3.6 percent this year
Vietnam has been moderately affected by the pandemic since it only relies on foreign revenue in its export sector. Fortunately, Vietnam has numerous export trading partners, which helps the country to diversify risks considerably well.
Vietnam’s key exports are electronic goods and electronic parts
As Vietnam’s key exports are electronic goods and electronic parts, the necessary changes to consumer behavior, particularly the trend of working from home, has benefited exporters as it has led to a rise in the demand for computer equipment and integrated circuits.
Overall, Vietnam’s exports in 2020 have fallen by only a small margin, with a projected 5 percent decline in the value of exports. The Vietnamese government has implemented stimulus policies in the form of grants and tax reduction. Vietnam’s economic growth rate is still expected to be at 3.6 percent this year.
Myanmar has seen relatively little economic impact from the COVID-19 crisis
Myanmar has seen relatively little economic impact from the COVID-19 crisis because its revenue gained through exports and tourism is relatively low. Even so, Myanmar’s exports have been severely affected since Myanmar’s key export is natural gas, and that has been heavily impacted by continuous fuel price reduction in the global market.
The value of Myanmar’s exports is projected to contract by 10 percent this year.