SCB EIC projects CLMV economic growth to moderate to 6.2% in 2026 amid geopolitical shocks, potential U.S. tariffs, and domestic constraints.
Broad-Based Economic Moderation Across CLMV
The Economic Intelligence Center of Siam Commercial Bank (SCB EIC) forecasts that economic growth across the CLMV region (Cambodia, Lao PDR, Myanmar, and Vietnam) will slow to 6.2% in 2026, down from 7.1% in 2025. This broad-based deceleration reflects an increasingly challenging external environment alongside constrained domestic policy buffers across all four regional economies.
Elevated downside risks continue to test regional economic resilience. Prolonged geopolitical tensions in the Middle East threaten to push energy prices higher, generating inflationary pressures, weakening local currencies, and delaying monetary easing measures necessary for domestic financial stability. Furthermore, softer global demand is projected to dampen export performance, tourism recovery, and foreign direct investment (FDI) inflows, while excess production capacity from China presents stiff competition for domestic producers. Potential U.S. Section 301 tariffs pose additional downside risks, particularly for Vietnam and Cambodia due to their significant exposure to the U.S. market.
Country-Specific Performance and Buffers
Vietnam is set to remain the regional growth outperformer with a projected expansion of 7.1% in 2026, compared to 8.0% in 2025. Growth will be anchored by its structural integration into global electronics supply chains, strong AI-related exports, sustained foreign direct investment inflows, resilient tourism, and supportive macroeconomic policies. However, Vietnam’s high export openess leaves it particularly vulnerable to global trade headwinds and external policy shifts.
Growth in Cambodia is projected to moderate to 3.7% in 2026 from 5.3% in 2025. The slowdown is largely driven by elevated energy import costs, softer domestic demand, ongoing border tensions with Thailand, and high non-performing loans (NPLs). Nevertheless, Cambodia’s competitive light manufacturing base and resilient export capabilities are expected to cushion the downside.
Lao PDR is forecasted to grow at 4.1%, down from 4.8% in 2025, as local currency weakness keeps inflation and import costs high, restricting space for monetary easing. Electricity exports and tourism will serve as key economic stabilizers, though high external debt will keep overall stability fragile. Meanwhile, Myanmar’s economic expansion is expected to soften to 2.6% from 3.4% in 2025. While supported slightly by external demand, rare-earth exports, and post-earthquake reconstruction, recovery remains deeply constrained by ongoing political instability and structural bottlenecks.
+-----------+---------------+---------------+
| Country | 2025 GDP Growth | 2026 GDP Growth |
+-----------+---------------+---------------+
| Vietnam | 8.0% | 7.1% |
| Cambodia | 5.3% | 3.7% |
| Lao PDR | 4.8% | 4.1% |
| Myanmar | 3.4% | 2.6% |
| Total CLMV| 7.1% | 6.2% |
+-----------+---------------+---------------+
Strategic Implications for Thailand
The regional economic deceleration directly affects Thailand’s economic dynamics, primarily leading to a narrower trade surplus with the CLMV block in 2026. Thai export volumes are expected to weaken due to softer regional demand and persistent Thailand–Cambodia border friction. Conversely, Thai imports from the region will remain resilient, driven predominantly by technology products—such as AI-related machinery and computers—sourced from Vietnam.
Thai outward direct investment into CLMV markets is anticipated to slow over the near term as economic uncertainties prompt businesses to adopt a selective, wait-and-see strategy. Despite short-term headwinds, the CLMV region remains strategically vital for Thai enterprises pursuing long-term value creation through natural resource access, cost competitiveness, regional supply chain linkages, and growing consumer markets.
Detailed analysis and full regional economic updates are available directly through SCB EIC channels at www.scbeic.com.
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