The increase in FDI to the CLMV region in the Association of Southeast Asian Nations (ASEAN) is supported by a recovery in global exports and tourism this year compared to last year, which can be expected will boost domestic demand through labor market recovery in CLMV countries. in general, the report said.
A report by the Bangkok-based SCB Center for Economic Intelligence said Cambodia, Laos, Myanmar and Vietnam (CLMV) could witness rapid growth this year thanks to increased FDI inflows. These countries have significant potential as future ASEAN growth leaders and are well positioned to gain this year from the 'China+1' strategy. Vietnam will lead the FDI cluster this year
The report notes that although the overall level of economic development of the CLMV countries is lower than that of other ASEAN member states, they have significant potential as leaders future growth of ASEAN.
These economies are well-positioned to benefit this year from a 'China+1' strategy, which sees businesses diversifying their production bases to minimize trade and cadastral risks value is increasing. This resettlement trend is driving FDI into CLMV countries in the medium term.
Vietnam will lead FDI this year in the CLMV cluster, with growth of 6.3% – up from 5.1% last year. Cambodia will come in second, with FDI expected to grow 6% this year, up from 5.6% in 2023.
Laos, ranked third in the EIC 2024 FDI forecast, is expected to achieve 4.7% FDI growth – a slight increase from last year's 4.5%.
The report said Myanmar expects FDI growth of 3%, up from 2.5% last year, and ranks fourth in investment growth in the CLMV region.
However, the growth rates of all CLMV economies will still lag behind the pre-Covid-19 average due to pressure from China's economic slowdown, as CLMV relies heavily on the following sectors: trade, investment, tourism, real estate and construction. record.
In the short term, trade disruptions in the Red Sea and drought in the Panama Canal could reduce global trade and significantly increase export logistics costs for CLMV countries.
In the long term, the EIC suggests, the CLMV region must prepare for rising protectionism around the world, especially more trade barriers and tariffs. The local currency CLMV will also face less downward pressure this year.
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