Myanmar’s Economy Faces Severe Setbacks Amid Conflict, Natural Disasters, and Worsening Food Insecurity

Migration has become a critical coping mechanism for many, as individuals seek better economic opportunities abroad.

Myanmar’s economy is grappling with multiple crises, including natural disasters, ongoing conflict, and shortages of essential commodities, leading to a bleak economic outlook for the coming year. According to the World Bank's Myanmar Economic Monitor, the country's GDP is projected to contract by 1% in the fiscal year ending March 2025, a sharp downgrade from previous expectations of modest growth.

The agriculture, manufacturing, and services sectors are expected to shrink as ongoing raw material shortages, unreliable electricity supply, and weak domestic demand stifle production. Over half of Myanmar's townships remain embroiled in active conflict, which continues to disrupt supply chains, cross-border trade, and overall economic stability. Typhoon Yagi and heavy monsoon rains have exacerbated the situation, causing severe flooding across 192 townships, affecting 2.4 million people. The floods have damaged critical infrastructure, with more than a third of businesses—especially agricultural firms—reporting significant disruptions to production. These compounded challenges have led to an increase in food insecurity, with food prices soaring amid supply chain breakdowns.

“The combined impact of natural disasters and ongoing conflict has deeply hurt Myanmar’s economy, with households suffering from rising prices and weak labor markets,” said Melinda Good, World Bank Country Director for Thailand and Myanmar. “Immediate support for recovery is essential to help vulnerable populations rebuild their lives and secure livelihoods.”

Migration has become a critical coping mechanism for many, as individuals seek better economic opportunities abroad. Migrants from Myanmar to Thailand and Malaysia typically earn 2-3 times more than they would within the country, while those migrating to Japan and South Korea earn over ten times more. According to a joint survey by the World Bank and the International Labour Organization, remittances from these migrants support 7.5% of Myanmar’s households.

However, these migration patterns also reveal the precarious state of Myanmar’s economy, as many people are fleeing the country under duress due to conflict and conscription. Kim Edwards, Senior Economist and Program Leader for Myanmar and Thailand, emphasized that “the growing out-migration under difficult circumstances is reducing the benefits of migration, as it often occurs through informal and unsafe channels. There is a need for better facilitation of migration through formal, regulated pathways, which would not only benefit Myanmar’s workers but also the receiving countries and their economies.”

As Myanmar’s economy faces increasing pressure from internal instability and natural disasters, international support and effective migration policies will be crucial in mitigating the country’s ongoing economic decline and helping citizens navigate these compounded challenges.