CLMV Outlook by EIC Q4/2020
The CLMV economies showed signs of a rebound from their 2Q20 trough due to the easing of lockdown measures during May-June 2020
The CLMV economies showed signs of rebounding from their trough in 2Q20 due to the easing of lockdown measures during May-June 2020. In the second half of 2020, the COVID-19 outbreak was contained in Cambodia and Laos, but Vietnam and Myanmar have been hit by a resurgence of the virus. Using regional lockdowns, Vietnam successfully re-contained the pandemic in August. On the other hand, Myanmar has been impacted by a soaring number of cases since September. In addition to ongoing impacts from rising unemployment and slow global demand, different degrees of COVID-19 resurgence, the effectiveness of containment measures, and country-specific factors will likely cause an already slow and uneven CLMV economic recovery to diverge even more. Vietnam’s recovery is on track with strong exports. In addition to COVID-19, the partial withdrawal of EBA privileges should exacerbate Cambodia’s external demand issues. Laos’ limited fiscal space and increased risks of debt distress will likely continue to slow down its economy. Lastly, Myanmar’s recent COVID-19 resurgence and lockdown re-tightening will likely result in a slower-than-expected recovery for FY2020/21.