YANGON, December 11, 2024 ¡ªNatural disasters, ongoing conflict, and widespread shortages of basic commodities have hit Myanmar's economy hard, while the economic outlook remains bleak. According to the World Bank Myanmar Economic Monitor, Myanmar¡¯s GDP is expected to contract by 1 percent in the fiscal year ending March 2025, a downward revision from the previous projection of modest growth.
The agriculture, manufacturing, and services sectors are projected to contract, with production constrained by ongoing shortages of raw materials, inadequate electricity supply, and weakness in domestic demand. Over half of Myanmar¡¯s townships are experiencing active conflict, which continues to disrupt supply chains and border trade. Macroeconomic volatility has persisted over the past six months. Adding to these compounding crises, recent Typhoon Yagi and heavy monsoon rains have caused severe flooding across Myanmar, affecting 2.4 million people in 192 townships. Floods damaged infrastructure and disrupted production, with over a third of all firms and more than half of agricultural firms reporting adverse impacts. Food insecurity has increased because of these shocks, with food prices continuing to increase rapidly.
¡°The recent natural disasters and ongoing conflict have severely impacted Myanmar¡¯s economy, with households bearing the brunt of rising prices and labor market weakness,¡± said Melinda Good, World Bank Country Director for Thailand and Myanmar. ¡°It is urgent and critical to support recovery efforts to help the most vulnerable populations rebuild their lives and livelihoods.¡±
Migration has served as a crucial coping mechanism in Myanmar, while also triggering domestic shortages of labor and human capital. Migrants to Thailand and Malaysia earn 2¨C3 times more than they would in Myanmar¡ªand those in Japan and the Republic of Korea earn more than 10 times more¡ªaccording to a recent survey by the World Bank and the International Labour Organization. The remittances these migrants send home provide the main source of income for 7.5 percent of Myanmar households.
¡°Recent migration flows highlight the precarious state of Myanmar¡¯s economy, as well as the pressures associated with conflict and conscription,¡± said Kim Edwards, Senior Economist and Program Leader for Myanmar and Thailand. ¡°Much of the recent out-migration has occurred under duress and via informal channels, reducing the gains from migration and increasing its costs. More can be done to facilitate migration through regular channels: this will ultimately benefit receiving countries as well as Myanmar workers and their families.¡±
Last Updated: Dec 11, 2024
