How has the economic situation in Myanmar changed?

(Myanmar): Myanmar's economy, which has been experiencing severe storms in recent months, is expected to grow at around 3% in the fiscal year ending in September 2022. However, this growth is lower than before the whole country was occupied by the military two years ago. This is according to the report of the World Bank released on Monday, January 30 and published by the Japanese newspaper NIKKEI.

As of July 2022, the depreciation of the exchange rate, combined with transportation constraints, has pushed up prices of goods in Myanmar, pushing inflation to nearly 20% for a year. . In addition, rising construction costs, power shortages and military-backed regulation have also severely affected economic activity.

According to a report by the Myanmar Economic Observer, in 2021, Myanmar's economy contracted by -18% but recovered by around 3% in 2022. And GDP per capita is about 13% lower than the previous level of COVID-19. Such forecasts are in stark contrast to most other countries, whose gross domestic product has already recovered to a higher level than in 2019.

Mariam Sherman, the World Bank Country Director for Myanmar, said Myanmar's economic potential has been declining in the last two years. The business environment is still not good due to the political crisis, import restrictions andPower outages and so on. All of this reflects the military's failure to govern the country and trade. In addition, regime leaders have called on Russia to invest in industrial and energy sectors, but these efforts have been in vain.

To control the exchange rate, the Central Bank of Myanmar set the US dollar at 1,850 kyat in April 2022. But the measure was ineffective, with the dollar peaking at 4,200 kyat in September last year.

In this regard, the World Bank said that restrictions on foreign exchange rates have led to a shortage of foreign currency, adding to inflationary pressures. But recently, the pressure has been eased and exporters have been heavily taxed to increase state revenue On the plus side, the central bank reported that the situation in the agricultural sector seemed to be improving despite the high cost of cultivation.

However, the sector is also facing risks. In fact, the World Bank survey data shows the controversy of agricultural companies as they face significant challenges in doing business in Myanmar by mid-2022.