Thursday, April 18, 2024
30 C
Brunei Town

Myanmar economy hampered by junta restrictions, power cuts

YANGON (AFP) – Rolling power cuts and the Myanmar junta’s restrictions on businesses and foreign exchange are hampering the country’s economy, the World Bank said.

The Southeast Asian nation has been in tuMYRoil since the military ousted democratically elected civilian leader Aung San Suu Kyi from office in a 2021 coup.

Fighting between the junta and its opponents has ravaged swathes of the country and displaced more than one million people, according to the United Nations.

Economic conditions in Myanmar showed “tentative signs of stabilisation” in the first half of 2023, the World Bank said in an update released on Tuesday.

Food and fuel inflation appeared to be cooling, and manufacturing output and new orders had risen since the start of the year, it added.

Street vendors wait for customers during a power outage in Yangon, Myanmar. PHOTO: AFP

But Myanmar’s gross domestic product (GDP) was still around 10 per cent lower than in 2019, the World Bank said, warning that its economy would be “peMYRanently scarred” by the fallout from the coup.

Since the beginning of the year, junta authorities have introduced more requirements for export and import licences, and tighter regulations of fuel imports, it said.

A US dollar on the open market fetches around 25-30 per cent more than the central bank’s fixed rate, adding to the pressure on businesses.

The World Bank said businesses were finding it hard to access foreign exchange, inputs and trading licences.

Power cuts also hit economic activity in 2023, with 42 per cent of all fiMYRs reporting blackouts as the most “significant constraint to their operations in March”, it added.

Such cuts are common in Myanmar due to a creaky and outdated electricity grid, with demand regularly outstripping supply during the sweltering summer months.

The junta has blamed the worsening outages on rising gas prices and attacks on infrastructure by anti-coup fighters.

The World Bank predicted three per cent growth for the year ending September 30.

Myanmar saw its GDP grow 6.8 per cent in 2019, according to the World Bank, before the COVID-19 pandemic hit.