Although most forecasts have predicted almost no growth this fiscal year, the Ministry of Planning, Finance and Industry expects the economy to rebound to near pre-pandemic levels. On July 13, U Set Aung, deputy minister of the Ministry of Planning, Finance and Industry, told parliament that Myanmar should see growth of 6% between October 1, 2020, and September 30, 2021. He added that the GDP is expected to reach MMK 125.8 trillion (around USD 91 billion). If the forecast is correct, it would represent an unlikely resounding economic recovery. The World Bank estimates that Myanmar’s economy grew 6.8% in the 2018-2019 fiscal year. But in June, the World Bank predicted only 0.5% growth in the current fiscal year. In the same month, the Asian Development forecasted 1.8% growth. In a televised panel discussion, Daw Aung San Suu Kyi said that Myanmar’s economy will likely get worse before it gets better.
Whether or not Myanmar will reach the ministry’s forecast will depend in part on the success of the COVID-19 Economic Recovery Plan. The comprehensive plan involves soft loans and tax breaks for pandemic-affected businesses and all SMEs; safety nets for the banking sector, including a public company to guarantee non-performing loans; and direct stimulus payments to Myanmar households. The plan costs an estimated USD 2.5 billion, the majority of which Myanmar has obtained via low interest loans from organizations such as the IMF and the Japan International Cooperation Agency.
COVID-19 began to batter its economy well before Myanmar reported its first case of the disease. However the state of global markets beyond Myanmar’s borders will also have a strong bearing on the country’s 2020-2021 growth. The pandemic has stalled border trade, especially with Myanmar and China, devastated the tourism and hospitality industries, wreaked havoc the manpower-heavy garment sector, and tempered FDI and foreign trade on the Yangon Stock Exchange. Many of the world’s largest economies like China seem to be on the path to recovery. However others, including the United States, continue to struggle to contain the disease.
