YANGON: Myanmar’s economy is headed for its worst performance since the pandemic as the strife-torn country reels from the impact of a devastating earthquake in March that’s estimated to have caused US$11 billion in damage, according to the World Bank.
The 7.7 magnitude earthquake on March 28 affected more than 17 million people and wrecked widespread damages to residential buildings, public infrastructure and heritage sites in areas accounting for about one-third of Myanmar’s gross domestic product.
The impact of the quake still continues to disrupt lives and livelihood, "exacerbating the already very difficult conditions in the affected areas,” the bank said in a report on Thursday (June 12).
The dent to economic output due to the earthquake will be equivalent to about 4% of Myanmar’s GDP in the fiscal year ending March 2026, the development bank estimated.
The economy will contract 2.5% in 2025-26 before rebounding to a growth of 3% the following year due to rebuilding efforts and the low base, it said.
Prior to the earthquake, which left 3,800 people dead and 207,000 people displaced in townships including Mandalay and Naypyidaw, the World Bank had forecast a 2% expansion this year. The worst-affected regions are expected to lose about a third of their production between April and September, it said.
"The economic aftershocks of the earthquake have struck on the back of ongoing challenges from conflict,” the World Bank said.
The South-East Asian nation has been struggling with a civil war, stinging inflation and a shortage of dollars since the military seized power in 2021 February.
A raging conflict between rebel groups fighting for independence and the regime has displaced about 3.5 million people, the lender said, citing United Nations estimates.
Inflation, which quickened to 34.1% in the year to April, may remain high at around 31% in the current fiscal year due to supply-chain disruptions associated with the quake and conflict-related logistics challenges.
The poverty rate may climb 2.8 percentage points from an already high ratio of 31% last year, according to the World Bank.
Myanmar’s budget deficit is seen widening to 6.9% by the end of March next year, up from 5.1% a year earlier with much of the deficit funding coming from the central bank, the report said.
"The earthquake caused significant loss of life and displacement, while exacerbating already difficult economic conditions, further testing the resilience of Myanmar’s people” Melinda Good, World Bank Division Director for Thailand and Myanmar said in a statement.
"Recovery efforts are essential to help the most vulnerable populations.” - Bloomberg
