CLMV economies face a slowdown driven by rising risks and mounting domestic challenges

Although CLMV countries are in the same region and face the same external factors from the global trade war, each country may face different risks: Higher import tariffs under the Trump 2.0 policy are a key factor, directly impacting the export-dependent economies of CLMV countries, especially Vietnam and Cambodia. They also face uncertainties in global trade and competition from cheap Chinese products, as well as country-specific challenges that will increase economic pressure.

Key highlights

• CLMV economies are expected to slow down: SCB EIC estimates that CLMV economies will slow to 5.1% in 2025 from 6.3% in 2024, in line with the global economic slowdown and world trade
• Downside risks remain across countries: Political instability and the impact of the earthquake in Myanmar, border tensions in Cambodia, and Lao PDR’s foreign debt vulnerability are all factors that continue to pressure domestic consumption and undermine investor confidence.
• Vietnam has stronger growth than other CLMV countries: Vietnam will benefit from the relocation of manufacturing bases to ASEAN, strong supply chains and various reform policy initiatives.
• Thailand’s trade and investment in CLMV slows down: a result of weaker regional demand
  Rising global trade uncertainty and heightened international political risks

SCB EIC projects CLMV economic growth to slow to 5.1% in 2025, down from 6.3% in 2024, due to higher US tariffs under the Trump 2.0 policy, which is impacting export-driven growth models, particularly in Vietnam and Cambodia, which rely heavily on international trade. Furthermore, the influx of cheap goods from China is eroding domestic production and competitiveness, while the global economic slowdown will also impact CLMV growth.