Poverty in Myanmar has reached unprecedented levels in the past six years, and economic growth is forecasted to stagnate at just 1% in the current fiscal year, according to a World Bank report released on Wednesday. The report highlights that ongoing violence, labor shortages, and a devaluing currency are significantly hindering business operations in the politically and economically unstable nation.

The World Bank attributes the economic struggles to the aftermath of the 2021 military coup, which halted a decade of tentative democratic and economic reforms. This political upheaval has left Myanmar grappling with severe economic challenges.

In its latest report, the World Bank had previously estimated a modest growth of around 2% for the fiscal year ending in March 2025, following a projected GDP increase of 1% in the year concluding in March 2024. However, this forecast has been adjusted downward.

"The downward revision in projected growth for 2024/25 is largely due to the persistence of high inflation and constraints on access to labor, foreign exchange, and electricity, all of which are likely to have larger impacts on activity than was previously expected," the World Bank report noted.

Efforts to obtain a comment from a junta spokesman were unsuccessful.

The protracted civil war, involving both new armed factions and established ethnic militias resisting the junta, has resulted in the displacement of over 3 million people and a surge in poverty rates to 32.1%, reverting to 2015 levels, as per the World Bank's findings.

"The depth and severity of poverty has worsened in 2023-24, meaning that poverty is more entrenched than at any time in the last six years," the report stated.

In response to growing armed resistance, Myanmar’s junta announced a conscription plan earlier this year to bolster its dwindling military forces.

"The announcement of mandated conscription in February 2024 has intensified migration to rural areas and abroad, leading to increased reports of labor shortages in some industries," the World Bank report highlighted.

Moreover, the junta's loss of control over key land borders with China and Thailand has severely impacted overland trade.

"Excluding natural gas, exports through land borders declined by 44%," the report detailed. “Imports via land borders declined by half, accounting for 71% of the decline in overall imports.”

Overall, merchandise exports dropped by 13%, and imports decreased by 20% in the six months leading to March 2024, compared to the same period a year prior, according to the World Bank.

The report also warned that ongoing currency volatility, compounded by recent government crackdowns, and rapid inflation will further strain households. Additionally, industries face continued challenges due to shortages in electricity and foreign currency, with an anticipated decline in energy production.

"The economic outlook remains very weak, implying little respite for Myanmar’s households over the near to medium term," the World Bank concluded.

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