Thailand
Myanmar growth to rebound next year if virus is confined quickly: ADB
Economic growth for Myanmar will slow significantly to 4.2 percent this year under the global health crisis but could rebound to 6.8pc in 2021 if the virus is confined quickly, according to a report by the Asian Development Bank (ADB).
The ADB’s annual Asian Development Outlook report, released this month, puts Myanmar’s GDP growth forecast in 2020 as the second highest in Southeast Asia, after neighbouring Vietnam, which is estimated to grow at 4.8pc.
Overall, ADB expects growth in Asia to slow sharply to 2.2pc in 2020 because of the COVID-19 pandemic and to recover to 6.2pc in the following year.
Forecasts are based on the assumption that countries seriously affected, including the major economies of the US, Europe, and China, will have their outbreaks come under control in three to six months and that activity will gradually return to normal
GDP growth picked up to 6.8pc in fiscal year 2018-19 from 6.4pc in the previous year. Growth accelerated in agriculture, reflecting improved weather and export demand, and industry, as garment manufacturing and construction expanded. The pickup in growth was accompanied by sharply higher inflation, surging from 5.9pc in 2017-18 to 8.6pc in 2018-19 as prices for food and imported fuel rose.
The report notes that although agricultural production expanded, higher external and domestic demand pushed up prices for some major food items despite exchange rate stability in 2019.
Myanmar inflation rates are forecasted to ease slightly, at 7.5pc in 2020 and 2021, while per capita GDP growth is expected at 3.3pc in 2020 and 5.9pc in 2021.
“The current account deficit will widen as exports and service receipts weaken, while the fiscal deficit will remain manageable. Empowering the rural economy and reducing poverty depend on creating jobs and building climate change resilience,” the report says.
Looking ahead, the ADB expects a pickup in industry and a gradual rebound in investment and exports to support Myanmar’s economic recovery next year. Growth in agriculture will decelerate to 1.3pc this year, owing to the impact on exports of primary products.
As of January 2020, foreign direct investment (FDI) commitments in Myanmar had increased from $1.3 billion a year earlier to $2.1 billion.
The Manila-based lender says FDI inflows will be supported by the finance industry liberalisation, tax reforms, improved electricity supply and other policies.
It adds that uncertainty about the direction of government economic policy remains during the political transition starting from parliamentary elections scheduled towards the end of this year.
“The evolution of the global pandemic and thus the outlook for the global and regional economy is highly uncertain. Growth could turn out lower, and the recovery slower, than we are currently forecasting. For this reason, strong and coordinated efforts are needed to contain the COVID-19 pandemic and minimise its economic impact, especially on the most vulnerable,” said ADB Chief Economist Yasuyuki Sawada.
Source: https://www.mmtimes.com/news/myanmar-growth-rebound-next-year-if-virus-confined-quickly-adb.html