Six Indicators of Myanmar's Economy during Covid-19
The economy of Myanmar has grown at a noticeable rate with a decrease in the poverty level from 48% to 25% between 2005 and 2017. World Bank was projecting the country’s economy to grow at 6.4% in 2020-21 and 6.7% in 2021-22, but Covid-19 will lower this rate to only between 2 - 3%.
The International Monetary Fund (IMF) has provided $ 356.5 million to Myanmar to cope with the impacts caused by Covid-19. The following six trends will indicate how the economy of Myanmar is coping with Covid-19.
1. The country has a little over 300 coronavirus cases even though its population is about 54 million, which might reflect the limited testing available in this developing country. However, the country has taken precautions through travel restrictions and the banning of public gatherings before cases are climbing up.
2. The economic shock caused by the coronavirus limits its economic growth. Myanmar is one of the poor nations in Southeast Asia. Because a large portion of the workforce and GDP is dependent on agriculture or in the informal sector, there is limited access to safety net programs. Therefore, it is complicated to understand and estimate the growth of the country in the short term.
3. The drop in gas price earlier in the year has been challenging as natural gas makes up 40% of their exports and 20% of government revenues in the 2018-19 year.
4. Differently from other countries in the regions, the kyat (Myanmar currency) has appreciated and this trend is expected to continue as they project the economy to recover from the impact of the virus. The emergency financial assistance provided by the IMF will also facilitate the increase in reserves as they navigate through the economic recovery.
5. Social spending, especially on healthcare is expected to increase during the economic recovery. The government will increase payments for those at risks such as doctors in the healthcare system and teachers in the educational sector.
6. Even though there are urgent needs for social spending on safety measures and the decline in revenues, the increase of debt in Myanmar is still at a low amount that it is still possible for the country to make some remarkable growth as it recovers.
Sources: IMF & World Bank
By: Noeut Sokhoeun