The Myanmar economy should shrink this exercise by 2%, due to the effects of the intensification of conflicts and the economic mismanagement of the military junta, according to the last economic prospects of the Myanmar of the BMI research group.
BMI, a unit of Fitch Solutions, cited the recent projection of the World Bank according to which the economy of the country will reduce by 1% during the financial year ending in March 2025, but said that even such a terrible prediction “could be too optimistic”.
As an explanation, he cited the impacts of current conflicts, natural disasters, rapid depreciation of money, high inflation and external migration, which combined to devastate the formal economy.
“We maintain our forecasts so that the economy contracts by 2.5% this exercise before stagnating during the 2010 financial year, leaving the economy 20.0% smaller than in the 2010 financial year,” said BMI. He added later: “With interior conflicts showing no signs of relaxation, the perspectives remain dark.”
According to the United Nations Office for the Coordination of the Last Humanitarian Humanitarian Affairs update, published in January, the total number of internal people (PDI) reached more than 3.5 million at the end of 2024, which is equivalent to around 6% of the population. At the same time, “humanitarian needs are increasing at unprecedented levels in Myanmar, with around 19.9 million people needing help in 2025.”
The BMI highlighted the impact of natural disasters, in particular the Yagi typhoon, which struck the country in September, leading to the loss of “hundreds of thousands of hectares of cultures” in nine states and regions. He said inflation will persist, due to “serious food shortages”, in particular in the regions that know the most active conflict, including the state of Rakhine, where the undergoing fight between the Armed Forces of Myanmar and the Arakane army has led to fertilizer shortages and commercial disruptions. The BMI has cited a recent United Nations report that food production in Rakhine should “meet only 20.0% of local needs by mid-2010”.
The Professor of the BMI clearly indicates that the junta policies have only aggravated the situation. In particular, the soldiers’ forced conscription campaign, announced for the first time in February 2024, led thousands of potential conscripts to flee the country, which becomes more of the country’s “quickly exhausting” workforce. According to AFP news agency, “more than a million people fled the brutal civil war of Myanmar to seek shelter and work in neighboring Thailand.”
The exodus “will not only lead to a sharp drop in productivity in the key sectors, but will also throw a shadow on market prospects even if the civil war ends inevitably,” said BMI.
He also said that junta’s price ceilings on daily necessities such as eggs, fish, meat and cooking oil could have “involuntary consequences”, pushing these goods in the informal markets where they would be sold at swollen prices, “intensifying inflationary pressures”.
All in all, the BMI report, such as the most recent economic prospects of the World Bank, shows few ways in which Myanmar can withdraw from its current economic death spiral. As long as the soldiers remain intact and the resistance to its reign persists, the country’s economy continues to atrophy, with impacts that could make the country go back by a generation.