Southeast Asian exports are beginning to be hit by the economic challenges faced by Europe, as concerns grow that possible recessions in the West could also strain Southeast Asia’s economic recovery efforts well into 2023, report Deutsche Welle.
Spiking inflation and energy costs, as well as other economic impacts of the Ukraine war, are likely to see European economies struggle over the coming 12 months, with consumers cutting back on spending.
This is expected to have a significant impact on Southeast Asian exporters, particularly those in textile manufacturing, the largest export sector for several countries in the region.
More precise trade figures from Southeast Asia will likely be released later this year, but across mainland Southeast Asia, preliminary numbers show exports have been declining since July.
In 2022, the export of Cambodia’s textile goods, which account for more than half of the country’s overall exports, grew year-on-year by 37% between January and June but slowed to 19.9% in July and just 2.7% in August.
Exports in total decreased by 7.5% in September, compared to the same month last year, according to data from the Cambodian General Department of Customs and Excise.
Vietnam, whose trade with EU markets soared by 14.8% last year to $63.6 billion (€64.4 billion), saw its exports decline by 14% between August and September, with many factories already suspending operations, according to Vietnam government data that was reported by local media.
In Malaysia, export growth looks strong in 2022 at 26%, but is expected to fall to 1.3% in 2023, according to UOB Research, the analytical wing of the Singapore-based bank, UOB.
Thailand and Myanmar, other major textile exporters, have also reported a drop in exports to EU states.