World Bank sees ‘critically weak’ outlook for Myanmar this year

World Bank sees ‘critically weak’ outlook for Myanmar this year

Demonstrators protest against the military coup and demand the release of elected leader Aung San Suu Kyi, in Yangon on Feb 6, 2021. (Reuters photo)
Demonstrators protest against the military coup and demand the release of elected leader Aung San Suu Kyi, in Yangon on Feb 6, 2021. (Reuters photo)

The World Bank is maintaining a bleak outlook for Myanmar in the wake of last year’s military coup and the ongoing pandemic, according to its latest Myanmar Economic Monitor, released on Wednesday.

The international lender estimates that Myanmar’s economy shrank 18% in the fiscal year through last September, and projects just 1% growth in the 12 months to September 2022. Myanmar’s economy could have been 30% larger without the twin blows of the pandemic and coup, the report said.

“While reflecting recent signs of stabilisation in some areas, the projection remains consistent with a critically weak economy,” the World Bank said in a press release accompanying the report on Wednesday morning in Asia.

“Economic activity continues to be affected by substantial weaknesses in both supply and demand. Firms continue to report sharp reductions in sales and profits, cash-flow shortages, and a lack of adequate access to banking and internet services.”

The February 2021 coup has weighed heavily on the economy. Western countries responded to the coup with sanctions, and a number of major companies announced plans to cease operations in Myanmar to protest the junta’s violence against civilians.

Nearly 1,500 civilians have been killed and more than 11,700 arrested since the coup, according to the Assistance Association for Political Prisoners. About 70,000 people were displaced last year, mostly after the coup, according to the Internal Displacement Monitoring Center.

Challenges for 2022 include the evolution of the pandemic and political conflicts, as well as disruptions to key services such as electricity, logistics and digital connectivity, the World Bank report said. The lender expects the proportion of people living in poverty in Myanmar to double from pre-pandemic levels. 

On top of jumps in unemployment and displacement, imports have become more costly, and revenue denominated in the local kyat currency is worth less in foreign-currency terms.

“The situation and outlook for most people in Myanmar continues to be extremely worrying” said Mariam Sherman, the World Bank’s country director for Myanmar, Cambodia and Laos. “Recent trends of escalating conflict are concerning — firstly from a humanitarian perspective, but also from the implications for economic activity.”

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