Myanmar\`s GDP growth to halve this fiscal: ADB

Asian Development Outlook 2020 forecasts Myanmar s GDP growth for the fiscal year ending Sept. 30 will fall by more than a half due to COVID-19. Myanmar s GDP growth has fallen to 1.8 percent due_ the Asian Development Bank (ADB) has reported that growth is forecast to bounce back to 6 percent in 2021. The forecast said_ growth will be supported by a stable performance in agriculture_ higher government spending and expansion in the telecommunications sector. ADB reported Myanmar s GDP growth at 6.7 percent in the last fiscal year before falling to 4.2 percent in April and 1.8 percent since June. Since March_ Myanmar s economy has significantly slowed down due to travel restrictions and supply chain blockages. The garment industry_ small- and medium-sized enterprises_ hotel and tourism and trade have been hit badly by the pandemic. The tourism industry has been severely affected since April. From October 2019 to July 2020_ international tourist arrivals fell by 60.7 percent year on year_ said ADB. It said manufacturing_ especially garment production_ has been affected in both demand and supplies. Cuts in new orders_ supply delays and reduction of the workforce pushed the purchasing managers index down in April to the lowest reading recorded. adb said agriculture is less effected by COVID-19 than other sectors and has been supported by strong domestic and international demand. Growth in agricultural exports  mainly rice_ beans and other pulses  accelerated by 19.5 percent in the first three quarters of the current fiscal year_ from October 2019 to June 2020_ over the same period of the previous fiscal year. However_ the bank warned that exposure to extreme weather_ such as flooding_ still poses risks to growth. It reported on the sharp contraction in the garment industry as manufacturing exports in the first three quarters of the fiscal year dropped year on year by 4.4 percent. However_ merchandise exports rose year on year by 2.7 percent in US dollar terms in the first half of the fiscal year_ largely supported by agricultural exports. The bank said imports increased by 9.2 percent_ largely driven by investment in government infrastructure projects_ widening the trade deficit to US$1.8 billion (2.4 trillion kyats). It said the approval of foreign direct investment rose to $4.3 billion (5.7 trillion kyats) in June from $3.2 billion (4.2 trillion kyats) in the same period last year. It said electricity projects_ real estate development and manufacturing remained attractive to foreign investors. The Ministry of Investment and Foreign Economic Relations investment target for the fiscal year is $5.8 billion (8 trillion kyats). However_ the ADB warned_  future investment inflows could disappoint expectations due to downside risks from the global economy .