An updated outlook report by the Asian Development Bank (ADB) predicts a return to the pre-pandemic growth rate in the next fiscal year. Although the report (titled “Wellness in Worrying Times”) sets Myanmar’s final growth for the current fiscal year (which ends September 30) to be 1.8%, it predicts growth will reach 6% next year. That rate would only be slightly lower than ADB’s pre-pandemic forecast for 2019-2020.
“Demand and supply shocks stemming from the pandemic caused broad and significant contraction in the economy,” the report reads. It cites manufacturing, especially for garments, and tourism as the hardest-hit sectors. “Businesses serving the domestic market resumed operation after the relaxation of COVID-19 containment measures, but weaker external demand and supply have hindered a return to full operation in trade-oriented fields,” it continued. On the other hand, the report said that agriculture has shown strong resilience thanks to rising internal and external demand and favorable weather. The report found that agriculture exports grew by 19.5% in the first three quarters of the fiscal year (see last week’s Number To Remember section). ADB expects pandemic-affected industries to recover next year, however it acknowledges that the recent new wave of COVID-19 cases “may trigger stricter containment measures and result in further disruptions in business activities.”
Despite this year’s slow growth, Myanmar’s is one of only three Southeast Asian economies predicted to show any positive growth this fiscal year, the other two being Brunei and Vietnam. Collectively, the economy of the subregion is expected to shrink 3.8% this year before recovering to a positive growth of 5.5% next year.