The economy of Myanmar has shown some signs of stabilising in the first half of this year but it is unlikely to recover to pre-Covid levels until 2027 or 2028, according to the World Bank.
The recovery is being hampered by a shortage of foreign exchange, import restrictions and power outages, the development lender said in its latest Myanmar country report released on Tuesday.
The business environment remains challenging and many firms are finding it difficult to access foreign exchange, obtain trade licences, import raw materials and adapt to logistics constraints, the World Bank said in its country report released on Tuesday.
The assessment serves as a warning against complacency in an economy that showed tentative signs of stabilisation in the first half of 2023, it said.
Among the positives it listed were a broadly stable market exchange rate, cooling inflation and an uptrend in many economic indicators.
Still, exporters are facing challenges from a combination of waning external demand, an overvalued official exchange rate and tighter currency conversion requirements, the bank said.
The World Bank is maintaining its growth forecast of 3% for the year ending Sept 30. But the economy is not likely to return to its pre-Covid levels until 2027 or 2028, said Kim Alan Edwards, the bank’s senior economist for Myanmar and Thailand.
Myanmar faced economic devastation during the pandemic, exacerbated by economic sanctions in the wake of the military coup in 2021 that toppled the civilian government led by Aung San Suu Kyi. While the central bank switched to a fixed exchange-rate regime last year, open market rates for dollars have been 25-30% higher than the official rate, hurting businesses.
Power outages, meanwhile, have worsened since early this year. The World Bank said 42% of all businesses and over half of manufacturing firms reported electricity blackouts as the most significant constraint on their operations in March.
