Myanmar’s economy showed tentative signs of stabilisation in late 2025 and early 2026, but a sharp increase in fuel prices has intensified economic pressures and weakened the country’s recovery outlook, according to the latest Myanmar Economic Monitor released by the World Bank.
Economic activity improved modestly following partial recovery from the March 2025 earthquake, easing power supply constraints and resilience in sectors such as manufacturing, construction and services. However, business output, sales and profits remained significantly below pre-2021 and pre-earthquake levels due to ongoing challenges including weak demand, unreliable electricity and limited policy flexibility.
The World Bank estimates that Myanmar’s real GDP contracted by 2 percent during FY2025/26, despite signs of improvement toward the end of the fiscal year. The country’s economic outlook remains subdued, with growth projected at just 2 percent in FY2026/27, down from an earlier forecast of 3 percent.
Rising fuel prices, driven by tensions in the Middle East, have added further strain to the economy. Higher transportation and logistics costs have increased production expenses and placed additional pressure on foreign exchange demand for fuel imports. Inflation accelerated sharply from March 2026, reaching 24.6 percent year-on-year in April, reducing household purchasing power and impacting vulnerable communities the most.
The report also highlights ongoing difficulties faced by Myanmar’s private sector. Businesses continue to struggle with rising operational costs, administrative challenges and inconsistent policy implementation. As a result, many firms are prioritising survival over expansion, limiting opportunities for job creation and income growth.
The World Bank warned that continued conflict, trade disruptions, weaker export earnings and global energy market volatility remain significant risks to Myanmar’s economic recovery. While recent improvements suggest some stability is returning, sustained progress will depend on stronger policy coordination, improved business conditions and greater economic predictability.
