Myanmar’s economy is showing early signs of stabilisation after a period of severe disruption, but rising fuel prices and ongoing challenges continue to weigh on recovery, according to the World Bank’s latest economic assessment.
Economic activity improved slightly in late 2025 and early 2026 following some recovery from the March 2025 earthquake, improvements in power supply and resilience in sectors such as manufacturing, construction and services.
Despite these improvements, economic conditions remain difficult. Production, sales and business profits are still below pre-2021 levels and continue to be affected by weak demand, electricity shortages and limited policy options.
The World Bank estimates that Myanmar’s economy contracted by 2 percent in fiscal year 2025/26. Growth is projected to remain limited at around 2 percent in FY2026/27 as the country faces continued uncertainty.
A fuel price shock linked to tensions in the Middle East has added further pressure. Higher fuel costs have increased transport expenses, raised production and distribution costs and increased demand for foreign currency to pay for imports.
Inflation has also accelerated, placing additional strain on households, particularly vulnerable communities. Consumer prices rose sharply in early 2026, reducing purchasing power and making essential goods more expensive.
Businesses across Myanmar continue to operate in a challenging environment marked by rising costs, regulatory difficulties and uncertainty. Many companies are focused on maintaining operations rather than expanding, limiting job creation and income growth.
The World Bank warned that continued conflict, trade disruptions and global energy price volatility remain major risks to economic recovery. Strengthening policy coordination and creating a more predictable business environment will be important for restoring confidence.
While recent improvements provide some hope, the report highlights that Myanmar’s economic recovery remains fragile and depends on addressing deeper structural challenges.
