As the five economies in mainland Southeast Asia re-emerge from the Covid-19 pandemic, their prospects for recovery and return to growth and development appear challenged, characterised by deteriorating balance of payments, fiscal weaknesses, currency depreciations, and rising inflation amidst global monetary tightening and recession risks.
For Cambodia, Laos, Myanmar, Thailand, and Vietnam, Covid-19 has undermined trade and investment, put manufacturing on hold, disrupted supply chains, halted tourist revenue, and dimmed growth prospects. As these economies face headwinds over the next three years, their recovery trajectories are likely to be divergent and dependent on external conditions and internal reforms to regain a sound footing.
To varying degrees during the pandemic, these five economies had to come up with fiscal stimulus packages with subsidies and handouts to shore up livelihoods and get by, resulting in lower revenue collection, budget deficits and slower growth or outright economic contraction.
