The World Bank has confirmed Myanmar’s deepening economic crisis, sharply cutting its GDP forecast for the military-ruled country to a 1 percent contraction for this fiscal year ending March 2025.
In its latest Myanmar Economic Monitor report, the bank urged immediate and coordinated efforts to meet humanitarian needs and support long-term economic recovery amid ongoing conflicts, widespread shortages, and natural disasters.
The World Bank’s forecast for the previous fiscal year (2023-2024) was 1 percent growth.
This year’s forecast, released on Tuesday, reported shrinkage in key sectors including agriculture, manufacturing, and services, driven by raw material shortages, electricity outages, and weak domestic demand.
It also noted that over half of the country’s townships are experiencing active conflict, disrupting supply chains and border trade.
Anti-regime resistance groups and ethnic armed organizations (EAOs) have taken control of most of the border with Bangladesh, India, China and Thailand.
Meanwhile, China has closed border gates to Kachin and northern Shan State to pressure resistance groups to stop fighting the regime. The border closure has cut off supplies to northern Shan and Kachin, causing shortages and hardship for residents.
The bank said severe flooding from Typhoon Yagi and heavy monsoon rains has compounded these crises, affecting 2.4 million people across 192 townships, damaging infrastructure, and disrupting production in over half of the agricultural sector. This had resulted in food insecurity and sharp price rises.
The natural disaster and ongoing conflict have dealt a severe blow to Myanmar’s economy, leaving households to shoulder the burden of soaring prices and a weakening labor market, said Melinda Good, World Bank Country Director for Myanmar and Thailand.
“It is urgent and critical to support recovery efforts to help the most vulnerable populations rebuild their lives and livelihood,” she said.
The bank also reported that mass migration has triggered a domestic labor shortage.
Since the regime enacted the conscription law in February, thousands have fled the country to avoid mandatory military service under the junta.
The report said Myanmar workers can earn 2-3 times more in Thailand or Malaysia, and over 10 times more in Japan and South Korea, with money they send home serving as a crucial coping mechanism.
Remittances are the main source of income for 7.5 percent of Myanmar households, the bank reported.
“Recent migration flows highlight the precarious state of Myanmar’s economy, as well as the pressure associated with conflict and conscription,” said Kim Edwards, senior economist and program leader for Myanmar and Thailand.
However, much of the migration occurs though informal channels, increasing costs and reducing benefits, he said.
Edwards urged efforts to expand migration through official channels to benefit both the receiving countries and Myanmar workers and their families.
