Myanmar is grappling with significant economic challenges following the earthquake in March, according to a recent World Bank report. The Myanmar Economic Monitor (MEM) anticipates a 2.5 percent decline in the country's GDP for the fiscal year 2025/26, primarily due to the earthquake's effects. Damage to physical assets is estimated at $11 billion, representing 14 percent of GDP. Over 17 million people were affected across Mandalay, Sagaing, Bago, Nay Pyi Taw Union Territory, and Magway, with nine million severely impacted.
"The earthquake caused significant loss of life and displacement while exacerbating already difficult economic conditions, further testing the resilience of Myanmar’s people," stated Melinda Good, World Bank Division Director for Thailand and Myanmar. She emphasized that recovery efforts are crucial to support vulnerable populations.
The disaster has disrupted production across all sectors due to factory closures, supply chain issues, labor shortages, and infrastructure damage. Economic output is expected to be about $2 billion lower than it would have been without the earthquake. The hardest-hit regions—Mandalay and Nay Pyi Taw—are projected to lose around one-third of their output between April and September. However, partial recovery is anticipated later in the fiscal year through reconstruction efforts.
These economic aftershocks occur amid ongoing challenges such as conflict, power shortages, and trade restrictions. Inflation remains high at an estimated 34.1 percent over the year leading up to April 2025.
Poverty levels are also concerning, especially among internally displaced populations. Before the earthquake, a survey estimated Myanmar's poverty rate at 31 percent in 2024—a figure higher than previous official estimates from 2017. Simulations suggest that poverty could rise by an additional 2.8 percentage points due to the earthquake.
"Myanmar’s compounding crises have put household coping mechanisms under severe stress," said Kim Edwards, Senior Economist and Program Leader for Thailand and Myanmar. "These pressures are pushing more workers into lower value-added jobs and are undermining learning outcomes among children, posing critical risks for Myanmar’s longer-term development."