YANGON (ANN/THE STRAITS TIMES) – Myanmar’s poverty has surged to its highest level in six years, and the nation’s economic growth is forecasted to hover at a mere one per cent in the ongoing fiscal year, according to a report released by the World Bank on June 12.
The report attributes the grim outlook to escalating violence, labour shortages, and a depreciating currency, all of which have compounded the challenges of conducting business in the conflict-ridden country. Myanmar has been grappling with political and economic turmoil since the military coup in 2021, which abruptly ended a decade of tentative democratic and economic reforms.
In December 2023, the World Bank had initially anticipated Myanmar’s economy to grow by approximately 2 percent in the current fiscal year, following an estimated GDP growth of 1 percent in the previous fiscal year ending in March 2024.
According to a report by the World Bank, the downward adjustment in projected growth for the fiscal year 2024/25 can be largely attributed to persistent high inflation and various constraints on labour, foreign exchange, and electricity access.
These factors are anticipated to have a greater impact on economic activity than previously anticipated.
Despite attempts to reach out for comment, a spokesperson for the junta did not respond to inquiries.
The ongoing civil conflict in the country, characterised by clashes between new armed factions and established ethnic militias against the junta, has resulted in the displacement of over 3 million individuals.
This has caused poverty rates to climb to 32.1 per cent, reminiscent of levels seen in 2015, as noted by the World Bank.
The World Bank’s report highlights a worsening trend in poverty depth and severity throughout 2023-24, indicating a deeper entrenchment of poverty compared to the past six years.
In response to escalating armed resistance, Myanmar’s military junta unveiled a conscription initiative earlier this year aimed at replenishing its dwindling military forces.
According to the World Bank, the introduction of mandatory conscription in February 2024 has spurred increased migration to rural areas and overseas, resulting in reports of labour scarcities in certain sectors.
Furthermore, the junta’s loss of access to key land borders with China and Thailand has led to a significant decrease in cross-border trade. The World Bank noted a notable 44 percent decline in exports excluding natural gas via land borders, along with a halving of imports, which accounted for 71 per cent of the overall import decline.
In the six months leading up to March 2024, merchandise exports saw a 13 per cent decrease, while imports plummeted by 20 per cent compared to the same period the previous year, as per the World Bank’s findings.
The World Bank also highlighted ongoing currency instability, which the junta has attempted to address through a series of recent arrests, coupled with rapid inflation, adding further strain on households.
Meanwhile, industries are anticipated to grapple with shortages in electricity and foreign currency, with energy production projected to further decline, according to the World Bank.
In summary, the World Bank paints a bleak economic outlook for Myanmar, indicating little relief for households in the near to medium term.
