World Bank Sees Myanmar’s Economy Returning to Growth

Dec 8 (Reuters) — Myanmar’s economy is beginning to show tentative signs of recovery, with gross domestic product (GDP) growth projected to rebound to around 3% in the next fiscal year, despite ongoing conflict and the severe impact of a powerful earthquake earlier this year, the World Bank said on Monday.

In its latest report, the World Bank noted that the expected recovery will be largely driven by post-earthquake reconstruction efforts and continued targeted assistance to the regions hit hardest by the disaster. Inflation, however, is forecast to remain elevated, staying above 20%.

“These early signs of recovery are encouraging,” said Melinda Good, the World Bank’s Division Director for Thailand and Myanmar. “However, Myanmar’s economy still faces formidable challenges, including limited financing for reconstruction, persistent conflict and insecurity, and an unreliable electricity supply.”

A spokesperson for Myanmar’s military government did not respond to requests for comment from Reuters regarding the report.

Earlier this year, the World Bank had projected that Myanmar’s economy would contract by 2.5% in the current fiscal year, which ends in March, following the devastating 7.7-magnitude earthquake in March. The quake affected more than 17 million people, roughly 31% of the country’s population.

The World Bank initially estimated direct damage to property and infrastructure from the disaster at around $11 billion — equivalent to about 14% of Myanmar’s GDP.

Myanmar has remained in deep political and economic turmoil since the military seized power in a 2021 coup that overthrew the elected civilian government led by Nobel laureate Aung San Suu Kyi. The takeover sparked mass protests that later evolved into a nationwide armed resistance against the junta.

The military administration has announced plans to hold multi-phase elections beginning on December 28, a move that has been widely criticized by human rights organizations and several Western governments, which argue the polls are designed to entrench the generals’ grip on power.

Frequently Asked Questions (FAQ)

Q1: What does the World Bank forecast for Myanmar’s economy?
The World Bank projects that Myanmar’s economy could rebound with about 3% GDP growth in the next fiscal year after a contraction caused by conflict and a major earthquake.

Q2: What factors are driving the projected economic recovery?
The expected rebound is mainly driven by post-earthquake reconstruction activities and targeted financial assistance for the regions most affected by the disaster.

Q3: Will inflation decline as the economy recovers?
No. The World Bank expects inflation in Myanmar to remain high, staying above 20%, despite signs of economic improvement.

Q4: How did the March earthquake affect Myanmar’s economy?
The 7.7-magnitude earthquake affected over 17 million people and caused an estimated $11 billion in damage to property and infrastructure, equal to about 14% of the country’s GDP.

Q5: What challenges continue to threaten Myanmar’s economic outlook?
Major challenges include ongoing armed conflict, limited reconstruction financing, unreliable electricity supply, and overall political instability following the 2021 military coup.

Q6: How does Myanmar’s political situation impact economic recovery?
Continued instability, security risks, and concerns over planned elections have weakened investor confidence and constrained economic growth, slowing Myanmar’s recovery.