Myanmar Economy May Suffer from a Sudden Economic Slowdown

Myanmar’s economy is likely to suffer a blow from a sudden economic slowdown and its subsequent lower FDI, according to the report on the impact of the COVID-19 on Myanmar’s export published by Myantrade.

Domestic consumption, the main driver of Myanmar economic growth, will weaken as a result of reduced household spending caused by increased unemployment and resulting income contraction.

Plummeting manufacturing output in industrialized countries translated to severe supply-side disruptions in the domestic manufacturing sector in Myanmar. As the COVID-19 outbreak is hitting major industrialized countries, including China, the United States, and the European Union (EU) the Member States, direct supply disruptions are hindering manufacturing production.

GDP and GDP growth in Myanmar( constant prices ), 2010–2021 (percent)

Weaker regional and global demand will result in a deceleration of export growth in Myanmar. Export earnings strategic sectors including natural gas, tourism, T&G and agricultural products are therefore likely to be severely impacted in the short-to-medium

A supply chain contagion effect is amplifying this direct supply shock as manufacturing sectors in less affected nations such as Myanmar find it harder to acquire the necessary imported industrial inputs to manufacture its export products. This is especially impacting the textile and garments (T&G) industry in Myanmar because over 90 % of raw materials for cut-make-pack garment activities are imported from China.

Contribution to real GDP growth in Myanmar( year-on-year growth ), 2013 / 14 to 2017 / 18 ( percent)

During the first quarter of 2020, China, the world’s largest manufacturer, registered an unprecedented decline in manufacturing output of 14.1 %, according to the United Nations Industrial Development Organization.

Written by Tayzar Bhone Myint

Source: https://mmbiztoday.com/myanmar-economy-may-suffer-from-a-sudden-economic-slowdown/