The global COVID-19 pandemic is dealing a severe blow to Myanmar’s economy. Economic growth in a baseline scenario is projected to drop from 6.8 per cent in FY2018/19 to just 0.5 per cent in FY2019/20, according to the World Bank’s Myanmar Economic Monitor, released on 25 June.
The 2019-2020 fiscal year began on 1 October, 2019 and ends on 20 September, 2020.
If the pandemic is protracted, the economy could contract by as much as 2.5 per cent in FY2019/20, with the expected recovery in 2020/21 subject to further downside risks, said the report. The report also said that robust policy actions are urgently needed. It will be important for the government to boost the effectiveness of the CERP by ensuring flexibility in spending targets, extending support to smaller enterprises and ensuring all poor households can benefit from the plan.
In efforts to lessen the major economic impacts from the global pandemic and achieve recovery of the economy, the Union Government established an emergency soft-loan of K100 billion in March with an interest rate of 1 per cent for a term of one year for small businesses in tourism and garment manufacturing affected by the global pandemic. Under its COVID-19 Economic Relief Plan (CERP), a short-term plan, launched in April, the government raised the loan amount to K200 billion- K500 billion, to be disbursed before the end of the year. The Central Bank of Myanmar and private banks have reduced the interest rate; medicines and medical equipment have been exempted from commercial tax; licence fees imposed on hotels and tourism enterprises have been exempted up to the end of this year amidst disruption of supply chains and travel bans which has negatively impacted the country’s SMEs, wholesale and retail trade, tourism-related services and transportation.
For the economic recovery funds, Myanmar received the loans of US$700 million from the International Monetary Fund, $270 million from Japan, $250 million from the World Bank and $30 million from the Asian Development Bank, in total $1.25 billion.
But, the conditions and requirements set by the government for most small-scale retail and wholesale businesses would be reconsidered to ensure the businesses get the loans easily. The most important thing is that we must contain the current achievement in fighting against the coronavirus. The country’s 299 cases of infections up to 28th June is not large, compared with other countries. Of them, 216 recovered with 202 being discharged from the hospital. The achievements came thanks to the united efforts of the people and authorities; we should be grateful that were able to contain the spread of the virus and save lives. It means we are also working together to save our economy.
We don’t feel small as a country in combating COVID-19. We can successfully confront all challenges, even though we are not among the wealthiest countries in the region.
GNLM
