Economic growth in conflict-torn Myanmar will be around 1% for the 2024-2025 fiscal year, the World Bank said on Wednesday, as escalating violence, labour shortages and a depreciating currency make it harder to do business.
In December, the World Bank had projected Myanmar’s economy would grow by around 2% during the period, after estimated GDP growth of 1% in the fiscal year that ended in March 2024.
“The downward revision in projected growth for FY2024/25 is largely due to the persistence of high inflation and constraints on access to labour, foreign exchange, and electricity, all of which are likely to have larger impacts on activity than was previously expected,” the World Bank said in a report.
The Southeast Asian country of about 55 million people has been in political and economic turmoil since a 2021 coup when the military ousted an elected civilian government, ending a decade of tentative democratic and economic reform.
Faced with a widening armed resistance against its rule, Myanmar’s junta earlier this year announced a conscription plan to replenish its depleted military manpower.
“The announcement of mandated conscription in February 2024 has intensified migration to rural areas and abroad, leading to increased reports of labour shortages in some industries,” the World Bank said.
The junta has also lost access to some key land borders with China and Thailand, leading to a sharp drop in overland trade.
“Excluding natural gas, exports through land borders declined by 44 percent,” the World Bank said.
ASEAN ‘deeply concerned’ by escalating Myanmar violence
“Imports via land borders declined by half, accounting for 71 percent of the decline in overall imports.”
Overall, merchandise exports fell by 13% and imports dropped by 20% in the six months to March 2024, compared to the same period a year earlier, according to the World Bank.
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