The last six months (July-December 2025) have marked a period of profound crisis for Myanmar, driven by a devastating earthquake, intensifying conflict, and persistent economic headwinds.
Economic Data and Trends
- Contractionary Growth: The World Bank forecasts that real GDP will contract by 2.0% in the fiscal year ending March 2026, a slight upward revision from an earlier estimate but still reflecting a crippling environment.
- Earthquake Impact: The 7.7 magnitude earthquake in March 2025 caused massive economic damage, estimated at approximately 4% of GDP (USD 2.6 billion) in the current fiscal year. Reconstruction efforts are hampered by funding constraints and ongoing instability.
- Inflation and Currency: While the local currency (kyat) has shown stabilization and some appreciation against the US dollar following sharp depreciation last year, inflation is expected to remain above 20% in the near term, severely straining household purchasing power.
- Sectoral Struggles: Manufacturing and agriculture continue to struggle due to power outages (reported by three-quarters of firms in April 2025), infrastructure damage from the quake, and conflict. The agrifood sector, however, is noted as a key driver of resilience and jobs.
- Illicit Economy Surge: Opium poppy cultivation has surged to a ten-year high in 2025, driven by economic collapse and conflict, with farmers increasingly relying on it as a “survival crop.”
Political and Humanitarian Outlook
- Escalating Conflict: The country remains engulfed in complex conflicts, with violence widespread and areas of military and ethnic armed group control shifting. The planned December 2025 elections are widely criticized as a means for the junta to legitimize control amid ongoing security concerns.
- Mass Displacement: The humanitarian crisis has deepened, with approximately 3.6 million people internally displaced due to conflict and natural disasters. This figure has risen sharply since 2021.
- Humanitarian Access & Need: Approximately 21.9 million people—nearly 40% of the population—require humanitarian assistance. Aid delivery is severely constrained by military obstruction and restrictions, a situation compounded by a massive funding shortfall, with the 2025 Humanitarian Response Plan only about 12% funded as of mid-2025.
- Long-Term Risk: The decline in formal sector jobs, leading more educated workers into agriculture, and significant learning losses due to school disruptions pose a substantial risk to Myanmar’s future human capital and long-term development prospects.
The overall outlook remains exceptionally challenging, with economic recovery fragile and heavily dependent on post-earthquake reconstruction, all against a backdrop of deeply entrenched conflict and humanitarian catastrophe.
Source: AI-generated content
