Amid the ongoing political unrest, the economy of Myanmar is predicted to shrink by 18 percent in the fiscal year between October 2020 to September 2021.
The World Bank in its economic monitor for July has said that the political turmoil and the rapidly rising third wave of COVID 19 is seriously impacting the economy already weakened by the pandemic of 2020. The decline in GDP on top of the contraction last year means that the Myanmar economy could become 30 percent smaller relative to 2019.
The shrinking of the economy may lead to a loss of 1 million jobs and further decline in the income of workers due to reduced hours or wages. The share of the Myanmar population living below the poverty line is also likely to double by the beginning of 2022 compared to 2019.
The World Bank report points out that the Myanmar Kyat has depreciated by about 23 percent against the US dollar since late January. Combined with trade disruptions it has led to sharp price rise for some imported products including fuel.
Despite the opening of banks and measures taken by the central bank of Myanmar, physical currency continues to be in short supply. Access to banking and payment services also continue to remain limited.
Over the longer term, the recent events could threaten the progress made by Myanmar over the last decade, says the World Bank report.