A man and a woman with face mask seen shopping at a wet mark in Yangon. Photo: Aung Htay Hlaing/The Myanmar Times

 

The global consequences of the COVID-19 pandemic is dealing a severe blow to Myanmar’s economy, the World Bank said on June 25. As a result, the country's economy is forecast to expand by just 0.5pc in the current fiscal year, compared to 6.8pc in fiscal 2018-19.

If the pandemic draws on for much longer, the economy could contract by as much as 2.5pc this fiscal year, with the expected recovery in 2020-21 subject to further downside risks, according to the World Bank’s latest Myanmar Economic Monitor.

The slowing economic growth threatens to drive up the poverty rate of the country until at least 2022-23. “At the moment the medium-term outlook for Myanmar’s economy is positive, but there are significant downside risks due to the unpredictable evolution of the pandemic," said Mariam Sherman, World Bank Country Director for Myanmar, Cambodia and Lao PDR.

The World Bank’s Myanmar Economic Monitor highlighted that the effects of the crisis are not being evenly felt across sectors. Industrial production is expected to contract by 0.2pc in fiscal 2019-20 as lockdown measures restrict access to labor, the closure of the overland border with China disrupts the supply of industrial inputs, and consumer demand remains soft.

Meanwhile, precautionary behavior and travel bans continue to negatively impact wholesale and retail trade, tourism-related services, and transportation.

On the flipside, the Information and Communications Technology sector is experiencing a surge of activity, driven by a sharp increase in telecommuting and e-commerce.

Should the domestic and global spread of the coronavirus be brought under control though, Myanmar’s GDP growth rate is projected to bounce back to 7.2 pc in fiscal 2020-21.

In the meantime, 'it will be important for the government to boost the effectiveness of its COVID-19 Economic Relief Plan by ensuring flexibility in spending targets, extending support to smaller enterprises and ensuring all poor households can benefit from the plan,” Ms Sherman said

 

 

News Source : Myanmar Times