Myanmar’s economy in chaos, outlook impossible: World Bank
The economy of Myanmar has fallen in turmoil so drastically since the military coup on February 1, 2021 that the World Bank said it is unable to calculate growth forecasts for the country beyond an estimation for the fiscal year 2021.
“Forecast[s] for Myanmar beyond 2021 are excluded because of a high degree of uncertainty,” the World Bank stated in its Global Economic Prospects report released on June 7.
Myanmar’s economy shrank by an estimated 18 per cent in fiscal year 2021 after growing 6.8 per cent and 3.2 per cent pre-coup in 2019 and 2020, respectively, a table in the report’s regional outlook for East Asia and Pacific shows. No figures are given for the period from 2022 to 2024, while most other larger developing countries show a gradual improvement in their gross domestic product (GDP) growth forecasts.
Myanmar is the only country in the East Asia and Pacific region for which the World Bank did not publish an economic forecast this time.
Downward spiral since the coup
Since last year’s military takeover, Myanmar’s economy has been in a downward spiral, with major international investors fleeing the country, banks barely functioning and inflation rising amid daily clashes between regime troops and anti-junta forces across the country.
The junta has aggravated the situation by imposing foreign currency and trade regulations, wreaking havoc on import and export markets and sparking fuel shortages, even in the big commercial centers.
”The near-term outlook remains fragile owing to sharply higher input prices, recurring electricity outages, escalating conflict and the recent introduction of trade and foreign exchange restrictions,” the World Bank said.
Currency in free fall
Myanmar’s local currency, the kyat, has been in free fall since the military takeover, dropping from around 1,391 kyat to the US dollar to around 1,850 kyat, whereby this still remains an unrealistic reference rate set by Myanmar’s central banks. In recent months, the black market rate for the kyat plunged to an all-time low of 2,200 for the US dollar.
Regime spokesperson Major General Zaw Min Tun has attempted to put a positive spin on things, announcing that about $3.98 billion of foreign direct investment entered Myanmar between February 1, 2021 and the end of May 2022. The electricity sector received the most investment with $3.1 billion and created nearly 49,000 jobs, he said at a press conference on June 3, according to The Irrawaddy.
Observers say that the investments are almost entirely coming from China and some from companies incorporated in Singapore by Myanmar business tycoons close to the junta.
The International Labor Organisation said earlier this year that Myanmar lost about 1.6 million jobs in 2021 due to the combined effects of the Covid-19 pandemic and the negative effects of the military coup on the economy.
While all sectors of the economy have been impacted, construction, garments, as well as tourism and hospitality are among the hardest hit, with employment having dropped by around a third in those sectors, the agency said.
The economy of Myanmar has fallen in turmoil so drastically since the military coup on February 1, 2021 that the World Bank said it is unable to calculate growth forecasts for the country beyond an estimation for the fiscal year 2021. “Forecast[s] for Myanmar beyond 2021 are excluded because of a high degree of uncertainty,” the World Bank stated in its Global Economic Prospects report released on June 7. Myanmar’s economy shrank by an estimated 18 per cent in fiscal year 2021 after growing 6.8 per cent and 3.2 per cent pre-coup in 2019 and 2020, respectively, a table in...
The economy of Myanmar has fallen in turmoil so drastically since the military coup on February 1, 2021 that the World Bank said it is unable to calculate growth forecasts for the country beyond an estimation for the fiscal year 2021.
“Forecast[s] for Myanmar beyond 2021 are excluded because of a high degree of uncertainty,” the World Bank stated in its Global Economic Prospects report released on June 7.
Myanmar’s economy shrank by an estimated 18 per cent in fiscal year 2021 after growing 6.8 per cent and 3.2 per cent pre-coup in 2019 and 2020, respectively, a table in the report’s regional outlook for East Asia and Pacific shows. No figures are given for the period from 2022 to 2024, while most other larger developing countries show a gradual improvement in their gross domestic product (GDP) growth forecasts.
Myanmar is the only country in the East Asia and Pacific region for which the World Bank did not publish an economic forecast this time.
Downward spiral since the coup
Since last year’s military takeover, Myanmar’s economy has been in a downward spiral, with major international investors fleeing the country, banks barely functioning and inflation rising amid daily clashes between regime troops and anti-junta forces across the country.
The junta has aggravated the situation by imposing foreign currency and trade regulations, wreaking havoc on import and export markets and sparking fuel shortages, even in the big commercial centers.
”The near-term outlook remains fragile owing to sharply higher input prices, recurring electricity outages, escalating conflict and the recent introduction of trade and foreign exchange restrictions,” the World Bank said.
Currency in free fall
Myanmar’s local currency, the kyat, has been in free fall since the military takeover, dropping from around 1,391 kyat to the US dollar to around 1,850 kyat, whereby this still remains an unrealistic reference rate set by Myanmar’s central banks. In recent months, the black market rate for the kyat plunged to an all-time low of 2,200 for the US dollar.
Regime spokesperson Major General Zaw Min Tun has attempted to put a positive spin on things, announcing that about $3.98 billion of foreign direct investment entered Myanmar between February 1, 2021 and the end of May 2022. The electricity sector received the most investment with $3.1 billion and created nearly 49,000 jobs, he said at a press conference on June 3, according to The Irrawaddy.
Observers say that the investments are almost entirely coming from China and some from companies incorporated in Singapore by Myanmar business tycoons close to the junta.
The International Labor Organisation said earlier this year that Myanmar lost about 1.6 million jobs in 2021 due to the combined effects of the Covid-19 pandemic and the negative effects of the military coup on the economy.
While all sectors of the economy have been impacted, construction, garments, as well as tourism and hospitality are among the hardest hit, with employment having dropped by around a third in those sectors, the agency said.
