According to the latest World Bank report released on Thursday, the Myanmar economy could actually contract by as much as 2.5 percent if the pandemic is protracted. The GDP growth rate for Myanmar was 6.8 percent in 2018-19.
In case the world economy swiftly recovers and Myanmar is able to control the economic impact of Coronavirus, the growth rate may bounce back to 7.2 percent in 2020-21, says the report.
The report says that it would be important for the government of Myanmar to have flexibility in spending targets and extending support to smaller enterprises in its COVID 19 fund and Economic Recovery Plan (CERP).
The World Bank report notes the disruption in supply chain of industrial inputs and lack of access to labour leading to a contraction of 0.2 percent in the industrial production in the FY 2019-20. Tax revenue is projected to decline by 6.0 percent during the current year.
The COVID 19 will also have a negative impact on poverty reduction progress of Myanmar. Under the baseline scenario, poverty rates are projected to increase in the short term and not return to their pre-crisis levels until FY2021-22.