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Myanmar’s Economy Remains Weak Amidst Ongoing Civil War and Isolation

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YANGON, MYANMAR - The Myanmar economy is expected to grow by 2.5% in FY2023 and 3.5% in FY2024, but this growth will still leave output 20% below its pre-pandemic levels, according to a recent report by Fitch Solutions.

Tepid Economic Rebound in FY2023

The tepid economic rebound in FY2023 is largely driven by exports to mainland China, while the domestic economy remains weak due to ongoing civil unrest and isolation from the international community. The country’s power sector expansion is also expected to be limited, reflecting the bleak outlook for the market over the coming 10 years.

Tin Mining Suspension Weighs on Global Supply

In a separate development, Myanmar’s suspension of tin mining in the Wa region from August 2023 onwards is expected to put pressure on global supplies and push prices higher in the short-to-medium term. Fitch Solutions has revised down its forecast for Myanmar’s tin production, expecting a decline of 30% year-on-year in 2023.

Economic Contraction Continues

Despite some signs of businesses adapting to the turbulent political landscape, the economy is still expected to contract further in FY2022, with real GDP growth forecast at -4.4%. Private consumption will continue to decline due to depleting savings and limited cash access for the population, while a lack of work and surging inflation are also weighing on the economy.

Key Factors Contributing to Economic Contraction:

Depleting savings
Limited cash access for the population
Lack of work
Surging inflation

Shipping Sub-Sector Contracts

The Myanmar shipping sub-sector is expected to contract significantly in 2021 due to prolonged civil unrest in the country. However, the longer-term outlook is more positive, driven by investment in logistics infrastructure in the country.

Positive Outlook for the Future:

Investment in logistics infrastructure
Improving business environment

Regional Insights

Fitch Solutions’ latest report provides a comprehensive analysis of the Myanmar economy and its prospects for growth. The report highlights the challenges facing the country’s economy, including ongoing civil war and isolation from the international community. However, it also notes that there are signs of businesses adapting to the turbulent political landscape, and an economic rebound in the coming years.

About Fitch Solutions

Fitch Solutions is a leading provider of data, research, and tools for businesses and investors. Our team of experts provides in-depth analysis and insights on the global economy, industries, and markets.