FILE PHOTO: A woman carries a bag of produce on her head at the Da Nyin Gone vegetable wholesale market in Yangon on September 19, 2023. The earthquake could increase the national poverty rate by 2.8 percentage points, pushing more households into poverty, the World Bank predicts. - AFP
YANGON: Myanmar's beleaguered economy is expected to contract by 2.5 per cent in the 2025/26 fiscal year largely due to the devastating impact of a powerful earthquake in late March, the World Bank said in a report on Thursday (June 12).
The World Bank said direct damages to property and infrastructure from the 7.7 magnitude quake were estimated at US$11 billion, or 14 per cent of the nation's gross domestic product, estimating that economic output would be about US2 billion lower than it otherwise would have been because of the quake.
The quake affected more than 17 million people, with nine million severely impacted, the World Bank said. The death toll has topped 3,700, according to Myanmar's ruling junta.
"The earthquake caused significant loss of life and displacement, while exacerbating already difficult economic conditions, further testing the resilience of Myanmar's people," Melinda Good, Division Director for Thailand and Myanmar, said in a statement. "Recovery efforts are essential to help the most vulnerable populations."
A junta spokesman did not respond to a call from Reuters seeking comment on the report.
In December, the World Bank had projected Myanmar's economy would shrink one per cent in the 2024/25 fiscal year that ended in March due to the severe flooding in the country.
Myanmar has been in turmoil since the military seized power in a coup in February 2021, sparking a civil war. There have been international efforts to stall the conflict, but rebels have accused the junta of breaching a ceasefire called to allow relief efforts to reach earthquake-affected areas.
The hardest-hit regions of Mandalay and Naypyidaw were expected to lose up to one-third of their production between April and September before a partial recovery in the second half of the fiscal year, the World Bank said.
The earthquake could increase the national poverty rate by 2.8 percentage points, pushing more households into poverty, the report stated. A survey before the quake estimated the poverty rate at 31 per cent in 2024.
"Myanmar's compounding crises have put household coping mechanisms under severe stress," said Kim Edwards, Senior Economist and Programme Leader for Thailand and Myanmar. - Reuters
