Jun 12, 2025, 10:26 AM
Jun 12, 2025, 10:26 AM

Myanmar's economy braces for 2.5% contraction after earthquake devastation

Tragic
Highlights
  • Myanmar's economy will shrink by 2.5% in the 2025/26 financial year due to the March earthquake.
  • The earthquake resulted in significant loss of life, approximately 3,800 fatalities, and extensive infrastructure damage.
  • The World Bank projects long-term economic challenges for Myanmar as it struggles to recover from both the earthquake and ongoing civil conflict.
Story

Myanmar, a nation already grappling with the effects of a brutal civil war, experienced a devastating earthquake on March 28, 2025. The magnitude-7.7 tremor left nearly 3,800 people dead and resulted in considerable destruction of homes and businesses across the country. The World Bank reported that the earthquake inflicted an estimated $11 billion worth of damage, which represented approximately 14 percent of the nation's GDP. These losses have significantly disrupted production across various sectors, as factory closures, supply chain issues, labor shortages, and damage to infrastructure hinder economic activity. The most affected areas included Naypyidaw, the administrative capital, and Mandalay, the second-largest city. Both regions are expected to see their economic output slashed by a third during the months spanning from April to September 2025. The World Bank anticipates a gradual recovery driven by reconstruction efforts in the latter part of the financial year, but the immediate impacts are dire. In addition to the deaths and widespread displacement, which currently affects over three million people, economic indicators are declining sharply. Inflation in Myanmar was estimated at 34.1 percent as of April 2025, revealing the strain placed on households and businesses alike. As these circumstances unfold, it has become clear that these events are exacerbating existing economic hardships initiated by the military coup in 2021, which triggered an ongoing civil war involving various factions resistant to military rule. Melinda Good, the World Bank division director for Thailand and Myanmar, reiterated the compounded challenges facing the population, emphasizing the immense hardship and displacement resulting from the earthquake on top of the already difficult conditions caused by years of conflict. With the poverty rate in 2024 already above 30 percent, the additional strains of this natural disaster raise concerns about the long-term sustainability of recovery efforts and the resilience of Myanmar's citizens.

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