Although economic growth for Myanmar is forecast to slow to 1.5 percent in 2020 due to the COVID-19 pandemic, this could rebound to 6pc by 2021, according to the World Bank’s Global Economic Prospects 2020 report released on June 8. The economy grew 6.3pc in 2019.
The slowdown is a result of domestic shutdowns, reduced tourism, as well as disrupted trade and manufacturing. However, the economy is expected to regain momentum next year if the global pandemic is brought under control and global trade resumes.
But the COVID-19 pandemic also brings new challenges to Myanmar, as serious risks remain which could delay the country’s recovery next year.
For example, the pandemic will likely further slow potential growth in the region by weakening investment and the supply chains that have contributed to Myanmar growth over the last decade. Economic activity in the rest of Asia is forecast to contract by 1.2pc in 2020 before rebounding in 2021. The regional outlook will significantly deteriorate if global trade tensions re-escalate.
Based on a survey by the Asia Foundation, half the enterprises surveyed believed business survival represented a moderate or high risk, with garments and textiles, hotel and accommodations being at particularly high risk.
Meanwhile, 92pc of enterprises reported lower sales due to COVID – 19 with 74pc facing sharp declines of more than half of normal sales. Businesses also laid off on average 16pc of their employees due to COVID – 19.
“Our first order of business is to address the global health and economic emergency. Beyond that, the global community must unite to find ways to rebuild as robust a recovery as possible to prevent more people from falling into poverty and unemployment.” World Bank Group Vice President for Equitable Growth, Finance and Institutions, Ceyla Pazarbasioglu, said.
Currently, the Myanmar government is focusing on improving trade and investment with flexible policies, providing financial stimulus to businesses and promoting digital platforms under its COVID – 19 Economic Relief Plan (CERP).
It is also trying to ensure the flow of essential goods such as food, commodities, medicines and medical supplies in the short-term, while raising investment promotion efforts and strengthening cooperation with development partners for more long term stability, Investment and Foreign Economic Relations’ Minister U Thaung Tun said last week.