Six European Union states have deferred debt payments from Myanmar worth nearly USD 100 million for the rest of this year to help the country’s efforts to focus on economic recovery from the COVID-19 pandemic.

Reported by several media outlets last Wednesday, the ambassadors of the European Union, France, Germany, the Netherlands, Finland, Austria and Poland announced that the EU has agreed to Myanmar’s request to its bilateral creditors to defer payments totaling USD 98 million, or 20% of Myanmar’s debt payments, due during the May-December 2020 period.

Myanmar’s economy has faced a significant slowdown due to COVID-19 since the start of the year. The latest Myanmar Economic Monitor released by the World Bank said that country’s economic growth could drop from 6.8 percent to 0.5 percent this fiscal year due to COVID-19, while ADB projects a growth of slightly over 1%.

Facing increased expenses due to its economic stimulus towards businesses and households (through the CERP) as well as decreased incomes due to lower tax inflows and lower trade, the suspension will relief some of the debt burden on Myanmar’s budget.