Myanmar Economy Faces Uphill Battle with Prolonged Challenges, World Bank Reports

The economic outlook for Myanmar remains precarious, with little immediate relief expected for households grappling with persistent economic hardships.

The World Bank's Myanmar Economic Monitor, released recently, paints a stark picture of Myanmar's economic landscape, characterized by significant challenges and subdued growth prospects.

Economic Growth and Outlook

Growth Projection: Myanmar's GDP is forecasted to grow by 1 percent year-on-year up to March 2025. This projection marks a downgrade from previous estimates, reflecting ongoing macroeconomic instability and conflict-related disruptions.

Comparison to Pre-Conflict Levels: Despite slight growth, economic output remains approximately 9 percent lower than 2019 levels, highlighting a prolonged period of economic stagnation.

Regional Context: Myanmar's economic struggle contrasts sharply with the growth trajectories of other large economies in the region.

Key Challenges

Inflation and Unemployment: Both inflation and unemployment rates persist at elevated levels, contributing to economic strain and social unrest.

Poverty: The poverty rate has surged, exceeding 32 percent in early 2024, reminiscent of levels last observed in 2015. An additional third of the population faces economic insecurity, underscoring the widespread economic hardship.

Consumption and Retail Trade: Household incomes have dwindled, leading to reduced consumption and sluggish retail trade activity, further dampening economic recovery prospects.

Socioeconomic Impact

Displacement and Economic Disruption: Conflict has severely disrupted livelihoods and economic activities, exacerbating poverty and hindering recovery efforts. Land border trade and internal goods movement have been notably affected.

Agricultural Sector: Despite challenges, the agricultural sector has shown resilience with improvements in crop yields and farmgate prices. However, ongoing constraints such as high input costs and access to credit continue to impede sectoral growth.

Long-term Implications

Human Capital and Development: Long-term effects include declining investments in health and education, diminished job quality, and increased outward migration. These factors collectively undermine Myanmar's potential for future growth and development.

The economic outlook for Myanmar remains precarious, with little immediate relief expected for households grappling with persistent economic hardships. Addressing these multifaceted challenges will require concerted efforts to stabilize the macroeconomic environment, mitigate conflict impacts, and prioritize sustainable development strategies.

The World Bank continues to monitor Myanmar's economic situation closely, emphasizing the need for targeted interventions to alleviate poverty, stimulate economic recovery, and foster inclusive growth across the country.