The government has announced a new long-term plan to help the economy recover from COVID-19. The new Myanmar Economic Recovery and Reform Plan (MERRP), which is being drafted, will replace the COVID-19 Economic Recovery Plan (CERP), explained U Thaung Tun, Minister of Investment and Economic Relations, in a virtual conference. The new plan will continue ongoing relief measures, which include tax breaks and soft loans for businesses in certain industries, as well as direct relief payments to individual households. It will be incorporated into the ongoing Myanmar Sustainable Development Plan.
MERRP accounts for a much larger economic fallout than was anticipated when the CERP was first unveiled. Earlier this year, State Counsellor Daw Aung San Suu Kyi predicted that the economic damage would get worse before it got better, and indeed, the massive new wave of COVID-19 cases has grounded flights and led to even stricter lockdowns than ever. The government has already spent more than USD 2.5 billion on CERP measures. The MERRP will increase the drain on public coffers, and may lead to additional borrowing from global finance organizations like the IMF and JICA, which have already loaned Myanmar hundreds of millions of dollars for pandemic recovery.
On the positive side, Myanmar’s economy did grow last fiscal year (just under 2%) and CERP doubtlessly played a role in protecting that growth, however meager. In a revised forecast, the Asian Development Bank predicted growth to bounce back to 6% this fiscal year. With cases continuing to rise and key economic centers still on lockdown, MERRP could be a critical piece of achieving that goal.