YANGON, June 12, 2024 ¡ª Myanmar¡¯s economy continues to face significant challenges and growth is expected to remain feeble as conflict, macroeconomic instability, and dislocation constrain production, according to a new report.
ľ¹ÏÓ°Ôº¡¯s Myanmar Economic Monitor, released Wednesday, projects gross domestic product will rise by 1 percent over the year to March 2025, in line with growth estimates for the previous year but down from the December 2023 forecast of 2 percent growth. Economic output is expected to remain about 9 percent below 2019 levels, in sharp contrast to the experience of other large economies in the region.
The report highlights a series of challenges facing Myanmar¡¯s economy and people. Inflation and unemployment remain elevated, while poverty has become entrenched across the country. Shortages of imported inputs, labor market disruptions, and electricity shortages have curtailed manufacturing activity. Falling real incomes and stretched household buffers have constrained consumption and retail trade.
The poverty rate topped 32 percent in early 2024, rising to levels last seen in 2015, while an additional third of the population is classified as economically insecure. At the same time, poverty is becoming increasingly entrenched, with its depth and severity approaching 2015 levels. Myanmar is now estimated to have 7 million more people living in poverty than it did immediately prior to the COVID-19 pandemic.
¡°Displacement, job losses, and income losses have wiped out much of the previous progress in poverty reduction,¡± said Mariam Sherman, World Bank Country Director for Myanmar, Cambodia, and the Lao PDR. ¡°The economic outlook remains very weak, with little respite for Myanmar¡¯s households over the near to medium term.¡±
In addition to its direct impact on livelihoods, conflict is also disrupting land border trade and the movement of goods within the country. In the six months to March 2024, goods exports fell by 13 percent and imports fell by 20 percent compared to the same period a year earlier.
The agricultural sector has shown signs of resilience, with improvements in rice and other crop yields and increased farmgate prices. However, elevated input prices, limited access to credit, and conflict-related disruptions are expected to continue constraining output in the near term.
¡°Over the longer term, declining household investment in health and education, reductions in employment and job quality, and increased outward migration will hinder human capital accumulation and scar Myanmar¡¯s future growth and development potential,¡± said Kim Edwards, Senior Economist and Program Leader for Myanmar, Cambodia, and the Lao PDR.
