Myanmar’s economy set to contract as floods and fighting take heavy toll, the World Bank says

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This article was published 11/12/2024 (313 days ago), so information in it may no longer be current.

BANGKOK (AP) — Myanmar’s economy is forecast to contract this year, the World Bank said Wednesday, as flooding and fighting take a severe toll nearly four years after the military ousted its elected government headed by Aung San Suu Kyi.

In an update issued Wednesday, the bank said about a fifth of all built structures and a tenth of Myanmar’s roads had been damaged by widespread flooding during heavy monsoon rains and a typhoon that swept through the country in September. About 2 million people were left homeless, the report said.

Meanwhile, fighting between the military and opposition forces remains fierce in some parts of the country, disrupting farming and manufacturing.

“The level and intensity of armed conflict remains high, severely affecting lives and livelihoods, disrupting production and supply chains, and heightening uncertainty around the economic outlook,” it said.

Overall, the report said the economy will likely contract 1% in annual terms in the April-March fiscal year.

Pro-democracy guerrillas and ethnic minority armed forces seeking autonomy have been battling the Myanmar army after it took power in early 2021, when generals ousted the elected government of Aung San Suu Kyi

The United Nations estimates that 3.5 million people, or about 6% of the population, have been displaced from their homes, more than half the country’s townships are embroiled in conflict and construction of major projects has been delayed, the report said.

The U.N. special envoy for Myanmar recently warned that the Southeast Asian nation is in crisis, with conflict escalating, criminal networks “out of control” and human suffering at unprecedented levels.

Julie Bishop, a former Australian foreign minister, warned that Myanmar risks becoming a “forgotten crisis.”

Adding to the troubles, disruptions from the conflict have helped to undermine the value of Myanmar’s currency, the kyat, which lost 40% of its value against the dollar in informal trading in the first eight months of the year, the World Bank report said.

That helped push inflation to more than 25%, while food prices increased more than 60% between April and September, it said.

Arrivals of international tourists are at about one-fifth the level before double shocks of the COVID-19 pandemic and the military takeover, and manufacturing has also weakened as electricity blackouts disrupt production.

Myanmar’s military administration stopped publishing trade data in mid-2024, the report said, but an analysis of data from its trading partners showed that garments and natural gas exports, which account for a large share of all its exports, fell more than 11% in April-September from a year earlier.

The report’s assessment of the outlook was for a further deterioration in conditions if fighting intensifies.