World Bank predicts Myanmar's economy to contract this year
World bank
The war-torn nation of Myanmar is already struggling under the weight of high inflation, a falling currency, and power and labour shortages. The World Bank predicts that the country's gross domestic product will contract this fiscal year.
In a study released on Wednesday by the World Bank, the situation is predicted to worsen in the aftermath of typhoon Yagi in September. The bank predicts a one per cent contraction in Myanmar's GDP for the current fiscal year ending in March 2025.
That is down from an earlier projection of 1 per cent growth. The military junta projected a 3.8 per cent growth rate. The World Bank estimates that by 2025, the country's GDP will have contracted by 11 per cent from 2019 levels.
Shocks from a 2021 military coup that sparked a civil war in the Southeast Asian nation are to blame for the drops.
The study showed manufacturing, agriculture, and service sectors are being negatively impacted. This is weighed down by the ongoing power outages and shortages of imported raw supplies.
The World Bank said, "A further escalation in conflict, including in the run-up to possible elections in 2025, or another severe natural disaster could depress output across a range of sectors."
The bank added, "If that happens, longer and broader disruptions may follow and plunge households deeper into poverty."
Additionally, the report claimed that supply lines and border trade have been disrupted. This is due to the current warfare that is affecting more than half of Myanmar's 330 townships. Part of the reason for the gloomy forecast is the internal scarcity of human capital.
Labour shortages have been driven by the increasing outbound migration from Myanmar in the past several years. According to the United Nations, approximately 6 per cent of the population, or 3.5 million individuals, have been displaced since October 2023.
(With the inputs from the agencies)
