Myanmar, once a thriving emerging economy, is now facing significant challenges in regaining momentum due to the ongoing civil war that is disrupting trade and livelihoods. The country’s economy grew at a slower rate of 1% annually in the past year, and economists expect a similar rate of growth for the current fiscal year. Despite this, nearly a third of the population in Myanmar is living in poverty, and the economy is about 10% smaller than before the pandemic.
The conflict has intensified as pro-democracy guerillas and ethnic minority armed forces clash with the military government that ousted Aung San Suu Kyi’s elected government early 2021. The military has faced significant resistance and suffered numerous battlefield defeats in recent months. This ongoing conflict has led to economic challenges such as trade disruptions, logistical issues, regulatory uncertainty, power outages, and macroeconomic volatility.
In addition to these challenges, over 3 million people have been displaced from their homes due to armed conflict across Myanmar. Furthermore, the value of the country’s currency, kyat, has decreased significantly leading to shortages of imported goods. According to reports by World Bank surveyed factories reported facing electricity outages which worsened labor shortages as workers fled overseas or rural areas.
Before the military takeover garment factories were a significant source of jobs and export revenues for Myanmar’s economy. However global brands have started pulling out of country resulting decline in manufacturing exports further worsening labor shortages caused by military rulers expanding conscription supplement troops which contributed significantly to economic challenges facing Myanmar near-medium term.
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