Myanmar’s economy will continue to be “severely tested” by the coup

(Reuters) – Myanmar’s economy will remain very weak for much of 2022 and will be “severely tested” by a coup a year ago, but there have been signs of stabilization in manufacturing and exports recently, according to the World Bank.

In the latest update on Myanmar’s economy, the World Bank predicts growth of 1% by September 2022, due to the effects of the pandemic and the ouster of the military-elected administration on February 1, 2021.

Myanmar’s economy has plummeted since the coup and the junta cracked down on its opponents, and the reactions of armed groups have backtracked on foreign companies concerned about political risks, sanctions and damage to their reputation.

The World Bank said there are major supply and demand problems, such as a shortage of cash flows for companies and access to credit, while half of the companies surveyed struggled last year due to a significant loss of kyat currency value.

“Short-term forecasts will depend on the evolution of the pandemic and the consequences of the conflict, the duration of foreign exchange and financial sector cuts, as well as disruptions to other key services, including electricity, logistics and digital connectivity.” “, said the World Bank in its January economic monitoring.

Myanmar’s junta has blamed last year’s economic crisis on foreign-assisted “sabotage”.

The military government on Thursday said it had accepted $ 3.8 billion in foreign investment since the coup to restore stability and confidence in its economic potential.

The World Bank said the aftermath of the coup would limit Myanmar’s growth potential, with most indicators suggesting that private investment has fallen sharply, while the cost of imports has risen and kyat revenues have lower value in foreign exchange.