世界发展银行-Myanmar-Economic-Monitor,-December-2020---Coping-with-COVID-19_88页_2mb

Myanmar Economic Monitor: Coping with COVID-19 (December 2020)

Core Content

The Myanmar Economic Monitor (MEM) provides an analysis of the economic impact of the COVID-19 pandemic on Myanmar, including recent developments, medium-term outlook, and policy recommendations. It is a collaborative effort between the World Bank and various Myanmar government ministries, with contributions from multiple experts and stakeholders.

Main Points

Recent Economic Developments

• Second Wave Impact: The second wave of the pandemic exacerbated public health and economic challenges, leading to increased domestic cases and more stringent containment measures.
• Sectoral Effects:
  • Agriculture: Resilient due to favorable weather conditions, with milled rice, corn, and other agricultural products showing growth.
  • Industry: Suffered a severe decline in output, particularly in manufacturing and construction, due to supply chain disruptions and reduced demand.
  • Services: Slowed growth, with tourism, retail, and personal services being the most affected. However, some subsectors showed resilience.
• Trade and Investment:
  • International trade declined significantly, especially in the second half of FY19/20.
  • The trade deficit widened to 2% of GDP.
  • FDI approvals increased, but actual inflows are likely to have slowed.
  • The Myanmar Kyat strengthened against the US dollar, reversing its depreciation trend from 2018.
• Inflation and Financial Sector:
  • Inflation declined to 1.8% YoY in August 2020.
  • Pre-pandemic credit growth had weakened, and the pandemic may have worsened private sector insolvencies.
  • The insurance sector faced setbacks due to the pandemic.

Fiscal Policy

• Revenue: FY19/20 revenue collection was better than expected, driven by State-Owned Enterprises (SEE) and transfers. However, a sharp decline is forecast for FY20/21 due to economic weakness and tax deferrals.
• Expenditure: Increased in FY19/20 to support the ambitious CERP, but is projected to decline in FY20/21 as a share of GDP.
• Budget Deficit: Expected to remain high, with a shift away from CBM financing.
• CERP Spending: Over half of planned CERP spending (about 1.7% of GDP) was disbursed by September 2020, but capital budget execution remains a challenge.

Economic Outlook and Risks

• Growth Projection: The economy is expected to grow by 2% in FY20/21, with a contraction in Q1 due to continued containment measures.
• Recovery: Partial recovery is anticipated in subsequent quarters as mobility restrictions ease and local transmission slows.
• Long-Term Outlook: Positive, with potential for recovery to 7% growth supported by new investments, infrastructure development, power and energy projects, and digital technology adoption.
• Risks:
  • Domestic: Prolonged economic disruption, rising poverty rates, and unsustainable coping mechanisms.
  • Global: Possible global recession, increased protectionism, and prolonged pandemic waves.
  • External: Vulnerability to capital flow volatility and weak external demand.

Key Policy Recommendations

• Stimulate Economy: Once the virus is contained and economic activity resumes, measures should be taken to boost the economy and lay the foundation for long-term growth.
• Invest in Public Infrastructure: To support aggregate demand and construction activity in the short to medium term, and increase productive capacity in the long term.
• Maintain Financial Stability: Given the risks of debt servicing challenges, financial stability should remain a priority.
• Digital Transformation: Increased investment in digital technologies can enhance productivity across various sectors, including the financial sector.
• Economic Opportunities: Myanmar should explore opportunities in pharmaceutical production, value-added food products, ship maintenance, and insurance, health, and education services.
• Fiscal Space and Sustainability:
  • Broaden the tax base with more progressive taxation and review tax holidays.
  • Improve budget planning and flexibility.
  • Expand social protection programs.
  • Monitor debt burden and fiscal risks.
• Human Capital Development:
  • Strengthen health and education systems to avoid disruptions in essential service delivery.
  • Focus on improving the effectiveness, efficiency, and equity of the health system.
  • Invest in women's and children's health and nutrition.
  • Ensure coherent delivery of essential health services.
  • Enhance community-based health services and public health financing.

Special Topics

Special Topic 1: Impacts of COVID-19 on Firms and Households

• Business Impact: 87% of firms reported negative impacts in October 2020, with most experiencing sales declines and investment cuts.
• Employment and Income:
  • Nearly one-third of households' main workers were unable to secure paid work.
  • Informal and casual workers in manufacturing were most affected.
  • Workers in retail and transport sectors saw reduced earnings.
• Poverty Impact:
  • Poverty rates are projected to rise from 22.4% in 2018/19 to 27% in FY20/21.
  • Without a strong policy response, poverty could return to pre-crisis levels by FY21/22.
  • Households resorted to reducing consumption and selling assets, increasing financial vulnerability.

Special Topic 2: Impacts of COVID-19 on Human Capital (Health and Education)

• Health Sector Challenges:
  • Disruptions in essential health services and inadequate public health financing.
  • Already fragmented and under-resourced health system.
  • Increased risk of health-related issues due to reduced access to care.
• Education Sector Challenges:
  • Learning disruptions and reduced access to education.
  • Decline in expected years of schooling and learning-adjusted years of schooling.
  • Risk of reduced investment in education and training.
• Recommendations:
  • Strengthen the health system through improved service delivery and community-based health worker programs.
  • Expand access to education and training, including technical vocational education and training (TVET).
  • Ensure continuity of essential services while managing the pandemic.

Conclusion

The report highlights the significant economic and social impacts of the second wave of the pandemic on Myanmar, emphasizing the need for targeted policy responses to mitigate poverty and support recovery. It calls for increased investment in public infrastructure, digital transformation, and human capital development, along with improved fiscal management and social protection programs. The long-term success of these efforts will depend on sustained reform and effective implementation.