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Myanmar’s poverty is worsening, economic growth is stagnating, World Bank report says Reuters

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(Reuters) – Poverty in Myanmar is at its highest level in six years and the conflict-ridden country is expected to grow just 1 percent this year with few signs of easing, the World Bank said on Wednesday.

In a report on the Southeast Asian country, which has been in political and economic turmoil since a 2021 military coup ended a decade of tentative democratic and economic reforms, the bank said rising violence, labour shortages and a weak currency have made it difficult to do business.

The World Bank in December projected Myanmar’s economy to grow by about 2 percent in the current financial year, after forecasting GDP growth of 1 percent in the year to March 2024.

“The downward revision to growth forecasts for 2024/25 is primarily due to continued high inflation and constraints on access to labor, foreign exchange, and electricity, all of which may have a larger impact on economic activity than previously expected,” the World Bank said in the report.

A junta spokesman did not respond to calls from Reuters seeking comment.

The country’s bitter civil war, in which new armed groups and established ethnic armies are fighting off the military government, has forced more than three million people to flee and pushed the poverty rate to 32.1 percent, back to 2015 levels, according to the World Bank.

“The depth and severity of poverty worsens in 2023-24, meaning poverty is more entrenched than at any time in the past six years,” the report said.

Myanmar’s military junta announced a conscription plan earlier this year to replenish dwindling military personnel as it faces growing armed resistance to its regime.

“The announcement of mandatory military conscription in February 2024 has led to increased regional and international migration and reports of labour shortages in some industries,” the World Bank said.

The junta also lost access to key land borders with China and Thailand, causing a sharp decline in overland trade.

“Excluding road exports, exports by road fell 44 percent,” the World Bank said. “Imports by road fell by half, accounting for 71 percent of the total decline in imports.”

Overall, merchandise exports fell 13% year-on-year in the six months to March 2024, while imports fell 20%, according to the World Bank.

The junta has made numerous arrests in recent weeks to try to tame the currency, but it has continued to fluctuate and rapid inflation will put further pressure on households, the report said.

Meanwhile, energy production is expected to fall further, according to the World Bank, and industry will have to deal with shortages of power and foreign currency.

“The economic outlook remains very weak, implying little respite for Myanmar households in the short to medium term,” the report said.

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