YANGON, December 11, 2024 — Myanmar's economy is facing significant challenges due to natural disasters, ongoing conflict, and shortages of basic commodities. The World Bank Myanmar Economic Monitor reports that the country's GDP is expected to contract by 1 percent in the fiscal year ending March 2025. This is a revision from an earlier projection of modest growth.
The agriculture, manufacturing, and services sectors are predicted to shrink as production struggles with raw material shortages, insufficient electricity supply, and weak domestic demand. More than half of Myanmar’s townships are experiencing active conflict, disrupting supply chains and border trade. Macroeconomic instability has persisted over the past six months. Recent Typhoon Yagi and heavy monsoon rains have led to severe flooding across Myanmar, affecting 2.4 million people in 192 townships. Floods have damaged infrastructure and disrupted production, impacting over a third of all firms and more than half of agricultural firms. Food insecurity has worsened due to these shocks, with food prices rising rapidly.
“The recent natural disasters and ongoing conflict have severely impacted Myanmar’s economy, with households bearing the brunt of rising prices and labor market weakness,” said Melinda Good, World Bank Country Director for Thailand and Myanmar. “It is urgent and critical to support recovery efforts to help the most vulnerable populations rebuild their lives and livelihoods.”
Migration has become a vital coping mechanism in Myanmar but has also led to domestic labor shortages. Migrants to Thailand and Malaysia earn two to three times more than they would in Myanmar; those in Japan and the Republic of Korea earn over ten times more according to a survey by the World Bank and the International Labour Organization. Remittances from these migrants provide the main income source for 7.5 percent of Myanmar households.
“Recent migration flows highlight the precarious state of Myanmar’s economy, as well as the pressures associated with conflict and conscription,” said Kim Edwards, Senior Economist and Program Leader for Myanmar and Thailand. “Much of the recent out-migration has occurred under duress and via informal channels, reducing the gains from migration and increasing its costs. More can be done to facilitate migration through regular channels: this will ultimately benefit receiving countries as well as Myanmar workers and their families.”