Myanmar Economy To Crawl Due To Coup

Myanmar's economy will remain critically weak for much of 2022 and will be "severely tested" by the impacts of a coup a year ago even as there are signs of stabilization in manufacturing and exports, according to the World Bank (WB), Reuters reported.

Photo Insert: A local Buddha statue maker in Mandalay, Myanmar

In its latest update on Myanmar's economy, the World Bank projects growth of 1% in the year to September 2022, weighed down by the impacts of the pandemic and the military's overthrow of an elected administration on Feb 1, 2021.

Myanmar's economy has tanked since the coup and the junta's crackdown on its opponents and ensuing backlash from armed groups has led to a retreat by foreign firms concerned about political risks, sanctions, and damage to their reputation.

WB said there were substantial supply and demand issues, cash flow shortages for businesses, and reduced credit access, while half of the firms it surveyed reported difficulties last year due to a sharp depreciation of the kyat currency.

"The near-term outlook will depend on the evolution of the pandemic and the effects of conflict, together with the degree to which foreign exchange and financial sector constraints persist, as well as disruptions to other key services including electricity, logistics, and digital connectivity," WB said in its January economic monitor.

Myanmar's junta has blamed last year's economic crisis on foreign-backed "sabotage." The military government on Thursday said it had approved $3.8 billion in foreign investment since the coup, owing to what it called a return to stability and confidence in its economic potential.

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