The ongoing civil war in Myanmar, which began after a military coup in 2021, has had a devastating impact on the country’s economy. Despite some economic recovery last year, with GDP growth of 3%, projections for this year indicate only a modest growth rate of 1%. This suggests that it will take decades for the economy to fully recover from the coup.
The situation has been exacerbated by international sanctions, economic mismanagement, and poor governance, which have further weakened the Myanmar economy. The regime’s focus on military spending to maintain control has diverted resources away from essential services, resulting in nearly a 50% reduction in spending on public health and education.
The value of the Myanmar kyat has depreciated by 55% against the dollar since the coup began, resulting in a banking crisis. Government-imposed currency controls have made it difficult for businesses to access US dollars for imports, aggravating the food crisis by hindering the importation of necessary agricultural equipment and fertilizer. In April 2022, the military government mandated the conversion of US dollar accounts to kyat at an inflated exchange rate for certified importers, limiting access to US dollars and making them scarce and expensive. Permission is now required to send money out of the country.
The economic situation in Myanmar is dire, with nearly half of its population living below the poverty line and over 18 million people needing humanitarian assistance. The ongoing conflict and economic instability have created a grim outlook for Myanmar’s future.
