Myanmar’s economic system to shrink as floods compound disaster, says World Financial institution

By Shoon Naing

(Reuters) – Myanmar’s economic system is anticipated to shrink by 1% within the present fiscal yr, the World Financial institution mentioned on Wednesday, sharply downgrading its financial forecast as extreme floods compounded the challenges dealing with the conflict-torn nation.

In June, the financial institution had projected Myanmar’s economic system would develop 1% in the course of the present fiscal yr, which ends in March 2025, however warned of accelerating poverty and escalating violence.

The nation of 55 million individuals has been in turmoil since 2021 when the navy seized energy from the elected civilian authorities triggering a nationwide protest motion that advanced into an armed rebel in opposition to the junta.

The coup abruptly ended a decade of tentative democratic and financial reform in Myanmar, with Western traders pulling overseas and sanctions disrupting commerce.

“The extent and depth of armed battle stays excessive, severely affecting lives and livelihoods, disrupting manufacturing and provide chains, and heightening uncertainty across the financial outlook,” the World Financial institution mentioned in its report launched on Wednesday.

The financial institution mentioned a number of sectors of the economic system have been struggling, and that agricultural manufacturing was prone to drop on account of Hurricane Yagi, which struck in September and induced widespread flooding.

“The manufacturing and companies sectors are projected to contract barely, given persistent shortages of uncooked supplies, imported inputs and electrical energy, weak home demand, and the continued impacts of battle and financial uncertainty,” it mentioned.

A junta spokesman didn’t reply to a name from Reuters looking for remark.

About 25% of Myanmar’s inhabitants is experiencing acute meals insecurity as a result of inflation and provide shortages exacerbated by the battle, the World Financial institution mentioned.

It mentioned inflation was anticipated to stay at 26% in annual common phrases this fiscal yr, barely decrease than 27.5% in 2023-24.

The increasing civil battle, the place a coalition of latest armed teams and established ethnic armies have crushed again the well-armed junta, has now engulfed greater than half of Myanmar’s 330 townships and compelled 3.5 million individuals from their houses, based on the report.

“Even assuming no additional escalation in battle, development is anticipated to stay subdued the next yr,” the World Financial institution mentioned.