Singapore’s Business Times newspaper has quoted Sian Fenner, lead Asia economist at Oxford Economics, as saying that lockdowns adopted to contain the spread of the virus have had a severe impact on manufacturing and exports in the four countries.
The textile industry was singled out as a sector badly hit by the pandemic as more than 55 % of the materials that go to clothes manufacturing in Cambodia, Myanmar and Vietnam come from China where factories were shuttered in early 2020.
Cambodia is expected to bear the brunt of the CMLV slowdown, since 66 % of its exports are generated by the clothing industry, which has historically reaped benefits from foreign direct investment.
Fenner forecast that FDI inflows will fall sharply this year and the recovery into 2021 will be muted amid weak global demand for apparel and the partial withdrawal from the “Everything But Arms” scheme with the EU.
However, the CMLV bloc is still tipped to turn in stronger growth than the ASEAN-5 economies - Indonesia, Malaysia, the Philippines, Singapore, and Thailand.
Oxford Economics predicted that CMLV economic growth is likely to average 5.1 % from 2020 to 2028, outpacing the ASEAN-5’s estimated average of 4 %.
