Myanmar economy will be severely tested by COVID 19, says World Bank

Yangon Myanmar January 27 ANI Myanmar's economy will be severely tested by the ongoing impacts of the military coup and the surge in COVID 19 cases in 2021, according to the World Bank.

The Myanmar Economic Monitor, released earlier this week, shows growth of 1 per cent in the year to September 2022, according to the World Bank. This comes after an expected 18 per cent contraction of the economy in September 2021.

The projection remains a critically weak economy, around 30 per cent less than it might have been in the absence of COVID 19 and February 2021 coup, despite recent signs of stabilization in some areas.

The World Bank said in a press statement that the outlook will depend on the development of the pandemic and the effects of conflict, as well as the degree to which foreign exchange and financial sector constraints persist, as well as disruptions to other key services including electricity, logistics and digital connectivity.

The situation and outlook for most people in Myanmar continues to be very worrying, said World Bank Country Director for Myanmar, Cambodia and Lao PDR Mariam Sherman. There are recent trends of escalating conflict, first from a humanitarian perspective, but also from the implications for economic activity. Myanmar is highly vulnerable to the Omicron variant of COVID 19 because of the low vaccination rate and inadequate health services. The Washington-based financial institute said that economic activity continues to be affected by weaknesses in supply and demand. There are a number of reductions in sales and profits, cashflow shortages and lack of adequate access to banking and internet services, as well as sharp reductions in sales and profits and a lack of adequate access to banking and internet services.

In October, around half of the companies experienced disruptions in the supply of inputs and raw materials due to increased costs due to logistics constraints and a sharp depreciation of the kyat, according to the latest World Bank firms' survey.

The statement said that ongoing economic pressures are having a significant effect on vulnerability and food security, particularly for the poor whose savings have been drained because of recent shocks.

The World Bank said that events since February 2021 are expected to limit the growth potential of Myanmar over the long term.