22.05.2026
Myanmar’s economy remains under severe pressure from prolonged conflict, chronic power shortages, tight foreign-exchange and trade controls, high inflation and the damage caused by the March 2025 earthquake. Output is estimated to have contracted again in 2025, despite some signs of stabilisation in manufacturing and supply chains. A modest rebound is expected in 2026–2027, but the recovery is likely to remain weak and fragile. Inflation should decline from extremely high levels, but remain the highest or among the highest in Southeast Asia. Fiscal pressures are rising, while external balances are supported more by import compression and remittances than by genuine export strength.
| Indicators | 2025 | 2026 | 2027 |
|---|---|---|---|
| GDP growth (%, yoy) | -2.0 | 2.4 | 2.7 |
| Inflation (%, yoy) | 22.0 | 24.0 | 16.0 |
| Employment rate (% of working-age population, 15+) | 53.5 | 53.5 | 53.5 |
| Fiscal balance (% of GDP) | -4.9 | -5.2 | -5.0 |
| Public sector debt (% of GDP) | 62.5 | 64.2 | 65.0 |
| Current account balance (% of GDP) | 0.4 | -1.5 | -2.0 |
Recovery remains weak and conflict-constrained
Myanmar’s economy is estimated to have contracted by 2.0% in 2025, reflecting the combined impact of conflict, earthquake damage, labour shortages, power outages and weak investment. Some real-sector indicators improved toward the end of 2025, including operating capacity and manufacturing activity, but output levels remain far below pre-2021 and pre-earthquake benchmarks.
Growth is expected to turn positive in 2026–2027, but the recovery will remain modest. Post-earthquake reconstruction, targeted public support and some improvement in domestic supply chains should help activity. However, conflict, policy uncertainty, infrastructure damage, foreign-exchange restrictions and unreliable electricity will continue to constrain production and private investment.
Inflation remains extremely high
Inflation moderated in late 2025 but remained very high, with consumer price inflation still above 20% on average. Food and non-food prices remain under pressure from logistics costs, energy shortages, exchange-rate distortions and supply constraints. Administrative price controls and tighter foreign-exchange rules have helped stabilise some prices, but they also create shortages and distortions.
Inflation is expected to remain very high in 2026 before easing in 2027. The disinflation path is fragile and depends heavily on exchange-rate stability, food supply, fuel prices and trade conditions. Higher global energy prices or renewed currency pressure could quickly push inflation higher again.
Fiscal pressures intensify
The fiscal deficit widened in 2025, driven by weaker revenue, earthquake-related needs and election-related spending. The deficit is expected to remain large in 2026–2027, reflecting reconstruction needs, infrastructure spending and limited revenue mobilisation.
Public sector debt is projected to rise gradually, from around 62.5% of GDP in 2025 to about 65% in 2027. Fiscal policy remains constrained by weak revenue, limited market access and reliance on central bank financing, which risks adding to inflationary pressure. The fiscal position is therefore fragile even if the headline debt ratio remains below the levels seen in some crisis economies.
External position is supported by import compression
The current account improved in 2025, mainly because weak domestic demand, import controls and foreign-exchange restrictions compressed imports. Remittances also provided support. However, this improvement does not indicate a strong external position: it reflects constrained economic activity rather than export-led recovery.
The current account is expected to return to deficit in 2026–2027 as imports recover gradually and energy costs rise. Export performance remains constrained by conflict, logistics disruptions, electricity shortages and foreign-exchange controls. The external outlook remains vulnerable to higher fuel prices, lower remittances, border-trade disruptions and further tightening of currency restrictions.
Overall outlook
Myanmar’s outlook remains among the weakest in Southeast Asia. A modest rebound is possible in 2026–2027, but it will not offset the deep losses caused by conflict, political instability, the 2025 earthquake and years of macroeconomic disruption. Inflation will remain high, fiscal pressures will persist, and external stability will depend heavily on import compression and remittances. A durable recovery would require conflict de-escalation, restoration of basic infrastructure, more predictable economic policy, improved electricity supply and a gradual easing of trade and foreign-exchange distortions.
Sources:
World Bank, Myanmar Macro Poverty Outlook, April 2026.
World Bank, Myanmar Economic Monitor, 2025–2026.
Asian Development Bank, Asian Development Outlook, April 2026: Myanmar.
International Monetary Fund, World Economic Outlook, April 2026.
International Monetary Fund, Myanmar country data, April 2026.
S&P Global Market Intelligence, Myanmar Manufacturing PMI updates, 2025–2026.
