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Overview

Decades of isolationist military rule left Myanmar poor, underperforming economically, and riven by the suppression of ethnic groups. A new Constitution in 2008 paved the way for a managed political and economic reform. In 2011, a gradual liberalization began under a transitional military government, setting in motion what has often been described as a “triple transition”: from military to civilian rule, from a planned to a more market-based economy, and from widespread internal conflict to durable peace.

The first democratic elections, in 2015, marked critical turning points for Myanmar, generating a wave of optimism. Unification of exchange rates, initial liberalization of product and factor markets, integration into regional markets, and modernization of economic and financial institutions and systems resulted in rapid economic growth (above 7 percent per year) and measurable improvements in social welfare after 2011. Poverty almost halved, falling from 48 percent to 25 percent between 2005 and 2017.

Rejecting the outcome of the second democratic elections in November 2020, the military assumed power on February 1, 2021, declaring a state of emergency and the takeover of all branches of government. In August 2021, the military leadership announced an extension of the state of emergency until August 2023.

The combined effects of the February 2021 military coup and of COVID-19 have deepened Myanmar’s economic and humanitarian crisis. The World Bank’s January 2022 Myanmar Economic Monitor projects that following an expected 18 percent contraction of the economy in the year ended September 2021, Myanmar’s economy will grow 1 percent in the year to September 2022. While reflecting recent signs of stabilization in some areas, the projection remains consistent with a critically weak economy, around 30 percent smaller than it might have been in the absence of COVID-19 and the February 2021 coup.

Ongoing economic pressures are having a substantial effect on vulnerability and food security, particularly for the poor, whose savings have been drained as a result of recent shocks. The share of Myanmar’s population living in poverty is expected to have doubled compared to pre-COVID-19 levels. Combined with pressures on agricultural production, rapid price inflation and reduced access to credit are expected to further compound food security risks. An estimated one million jobs are lost, and many other workers experience a decline in their incomes due to reduced hours or wages. With a low vaccination rate, inadequate health services, and recent trends of escalating conflict, Myanmar continues to be highly vulnerable to the ongoing COVID-19 pandemic.

Over the longer term, recent events have the potential to jeopardize much of the development progress that has been made over the past decade. Significant impacts on investment, human capital accumulation, and the environment for doing business are likely to impair prospects for economic growth.

 

Updated as of April 2022

 

 

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Myanmar: Commitments by Fiscal Year (in millions of dollars)*

*Amounts include IBRD and IDA commitments
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Country Office Contacts

Yangon Office
Level 21, Sule Square, 221, Sule Pagoda Road, Kyauktada Township, Yangon 11182, Myanmar
+95 1 925 5030
Washington DC
1818 H Street NW, Washington DC 20433
+1 202-473-4709