World Bank cuts Myanmar growth forecast as fuel shock deepens economic strains

Myanmar’s economy is showing tentative signs of stabilisation but the recent fuel price shock has amplified pressure on the civil-war-ravaged Southeast Asian country, the ​World Bank said in a report on Tuesday.

The forecast for Myanmar’s ‌real GDP growth was cut to 2.0 per cent in the 2026/27 fiscal year, which began in April, from a projection of 3.0 per cent made before the war in Iran caused the ​global energy shock, the bank’s Myanmar Economic Monitor report showed.

Real GDP ​was estimated to have contracted by 2.0 per cent in 2025/26, the ⁠World Bank said.

“While there are signs that economic conditions have stabilised, Myanmar’s ​economy remains under significant strain,” said Melinda Good, World Bank division director for ​Thailand and Myanmar, noting that ongoing shocks had revealed deep structural flaws that would hamper a fragile recovery.

The surge in energy prices had disrupted the economy by driving up ​costs for transport, logistics, production, and distribution, while also intensifying foreign exchange ​demand for fuel imports, the report said.

The report noted that even before the energy crisis, ‌indicators ⁠such as output, sales, and profits remained below levels before a 2021 coup and last year’s devastating earthquake.

The World Bank cited numerous risks to the economic outlook including the civil war, disruptions to trade and logistics, as well as external ​pressures such as ​weaker export earnings ⁠and energy price volatility.

Myanmar has been in turmoil following a 2021 military coup, which toppled the elected civilian administration ​of Nobel laureate Aung San Suu Kyi and triggered nationwide ​protests that ⁠escalated into armed rebellion against the regime.

In March 2025, a massive earthquake caused further significant economic disruption. The economy was improving modestly into early 2026 before ⁠the Middle ​East conflict erupted, the World Bank said.

Regime leader Min Aung Hlaing assumed the presidency in Myanmar on April 10, after a military-engineered election that barred key opposition groups ​and was derided as a sham internationally.

REUTERS