Cambodia and Thailand’s financial exposure to Europe would make the two counties the most vulnerable regionally, an ANZ Bank report showed.
The Kingdom’s exports and tourism sectors were on increasingly unstable ground as Europe’s debt crisis advanced.
“We look at the 2009 global financial crisis for guidance. Due to its high exposure to [the United States and Europe], Cambodian exports dropped in 2009, as did its real GDP growth,” the report stated. “In short, though the Greater Mekong region is not immune to the currently unfavourable external growth environment, we expect the four economies to perform quite differently in a worst case scenario: growth in Thailand and Cambodia will likely deteriorate the most, whereas Laos will continue to grow strongly.”
Between 2009 and 2011, an average of 27 per cent of Cambodia’s gross domestic product was generated by exports to the United States, the European Union, Japan and China.
Mining, hydropower and construction in Laos will drive its growth this year, which the report projected to be the highest in Asia at 8.3 per cent year-on-year GDP growth.
Thailand, withe 63 per cent of its GDP generated by exports, was deeply affected by the economic crisis in 2009.
Vietnam was less affected due to a credit boom at the time.
Although its growth will be constrained this year, Vietnam’s rampant inflation looked to be controlled.
To contact the reporter on this story: Don Weinland at [email protected]