Publication: Myanmar Economic Monitor, December 2023: Challenges Amid Conflict
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2024-02-12
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2024-02-12
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Economic conditions in Myanmar have deteriorated in the past six months, with the signs of recovery observed in the first half of 2023 proving to be fragile and short-lived. Conflict has escalated across much of Myanmar since October causing displacement, labor shortages, and increased logistics costs. Renewed pressure on the exchange rate and inflation has been triggered by a combination of internal and external developments. Interventions to encourage foreign currency inflows and regulate exchange rates have generally been ineffective in restoring stability, while exacerbating uncertainty and market distortions. Power outages have persisted throughout the year, indicating underlying structural challenges in the energy sector. Against this challenging backdrop, indicators of economic activity have generally deteriorated since mid-2023. Meanwhile, fiscal space remains constrained, with a widening deficit in large part financed directly by the central bank. Household incomes continue to be stretched by the cumulative impact of recent shocks. One coping mechanism that is becoming more common is migration. Outward flows have increased recently due to conflict, declining real incomes, and reduced economic opportunities. In light of these severe challenges, near-term growth prospects have weakened further. Looking beyond these overall economic trends, this edition also provides an in-depth analysis of Myanmar’s garment sector, a key driver of growth and job creation in the economy. As the special topic section of this report shows, Myanmar’s garment industry has significant potential to act as a driver of growth in employment, labor productivity, and incomes, following the path of several other East Asian countries.
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“World Bank. 2024. Myanmar Economic Monitor, December 2023: Challenges Amid Conflict. © World Bank. http://hdl.handle.net/10986/41042 License: CC BY-NC 3.0 IGO.”
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