Myanmar’s once-thriving economy is struggling to regain momentum due to ongoing civil unrest that has been disrupting trade and livelihoods. According to a recent report by the World Bank, the country’s economy grew at a slow 1% annual pace in the year that ended in March, with a similar rate of growth expected for the current fiscal year. The report also highlights that nearly a third of the country’s population is living in poverty, and the economy is about 10% smaller than before the pandemic.
Since early 2021, pro-democracy rebels and ethnic minority armed forces have been fighting against the Myanmar military, resulting in unprecedented battlefield defeats. This ongoing conflict has impacted the business environment, with factors such as conflict, trade disruptions, regulatory uncertainty, and power outages constraining economic activity.
More than 3 million people have been internally displaced due to armed conflict across Myanmar, resulting in a drop of value of its currency kyat and shortages of imported goods. About one-third of factories surveyed reported facing electricity outages. Furthermore, garment factories have lost jobs and export revenues as global brands pull out of the country due to political instability.
Labor shortages have worsened due to military expansion of conscription that forced workers to flee to rural areas or overseas. The overall economic outlook for Myanmar remains weak with little respite expected for households in the near to medium term due to challenges such as conflict, trade disruptions, macroeconomic volatility, regulatory uncertainty and power outages impacting economic recovery.
In conclusion, Myanmar’s economy has been severely affected by civil war which has resulted in slow economic growth rates and increased poverty levels among its population. The ongoing conflict has also led to labor shortages and affected industries such as garment factories which are losing jobs and export revenues. The country needs immediate action from both government and international community to resolve this crisis and restore stability for its citizens.
