Cambodia, Laos, Myanmar and Vietnam (CLMV) will soon offer rosy prospects for Thai exports within ASEAN, thanks to a number of positive factors. Among them are geographic proximity and land transport networks that can facilitate cross-border trade with Thailand. In addition, per capita incomes within CLMV are growing and their trade liberalization efforts are on track for many tariffs to be cut to duty free status along with AEC integration in 2015.
Amid global economic headwinds from the Eurozone debt crisis that have begun to take a toll on Thai shipments to the EU, CLMV has become a thriving export market for Thailand. During 5M12, the share of Thailand's exports to CLMV increased to 7.8 percent of our total outward shipments, bettering the 6.8 percent growth to the European Union. Given this, we at KResearch expect that Thai exports to CLMV in 2012 will expand perhaps 20 percent to USD18.7 billion (THB570 billion). Such increase would help Thai exports to grow 10 percent overall this year – or within a projected range of 7.0 to 15.0 percent – even if the Eurozone debt crisis persists.
Conditional to our current projection, KResearch expects that the Eurozone may face recession this year, contracting around (-)0.8 percent, or perhaps growing up to 0.2 percent. However, if the Eurozone debt crisis worsens into further global economic and financial turmoil, then Thai exports may slip into a contraction (though highly unlikely at this time), whereas shipments to CLMV will continue to grow, albeit at a lesser rate than projected above, as most of our exports to those countries are for their domestic consumption or for long-term investment projects.
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