Analysts Linda Liu and Chua Hak Bin kept their forecast for Vietnam’s GDP growth at +2.9 percent for 2020.(Photo: VNA)Singapore (VNA) – Economic recovery in CLMV countries (Cambodia,Laos, Myanmar and Vietnam) depends on their ability to contain the second waveof the COVID-19 pandemic, according to a report from Maybank Kim Eng.
Analysts Linda Liu and Chua Hak Bin kept theirforecast for Vietnam’s GDP growth at +2.9 percent for 2020 but lowered projectionsfor Cambodia, Myanmar, and Laos. Cambodia specifically will slip into a shallowrecession in 2020 (-1 percent) followed by a +5.9 percent growth recovery in2021, they said.
Meanwhile, while Myanmar and Laos may avoid a recession; however,the recovery remains tentative because of a second wave of COVID-19infections.
Myanmar is the latest hotspot within CLMV as a “monstrous secondwave” of the pandemic swept the country since late August. As of October 18, COVID-19cases in the country totaled 34,875, with 838 deaths. The country has sincere-imposed domestic travel curbs and placed Yangon and nearby provinces underlockdown. Most garment factories in Yangon have also been ordered to shut downuntil October 20.
The report stated that Myanmar’s 2020 general elections, which areslated for November 8, takes place when the country is facing a major secondwave of COVID-19 infections. Therefore, they may increase healthcare risks,worsen the spread and derail the economic recovery.
Overall, inflation remains positive across the CLMV economies despite thedownturn, with Laos’ inflation elevated at above +5 percent amid higher foodprices and weaker currency.
The analysts raised inflation forecasts for Laos (+5.5 percent in 2020 and +4.2percent in 2021) and Cambodia (+2.8 percent in 2020 and +2.7 percent in 2021),but lowered it for Myanmar (+5.8 percent in 2020). They maintained theirheadline CPI forecasts for Vietnam at +3.3 percent in 2020 and +3 percent in2021.
CLMV currencies saw diverging trends, with strong appreciation inMyanmar kyat (+11.5 percent YTD against the USD) but depreciation in the Laoskip (-3.9 percent). Vietnam dong (+0.02 percent) and Cambodia riel (-0.9percent) were largely stable./.
VNA
