Research Briefing | Jun 25, 2021

No escape from Myanmar military coup’s economic damage

Ipad Frame (50)

Myanmar’s Feb. 1 military coup, which ousted the newly reelected NDL party over unsubstantiated claims of election fraud, has been deadly in human terms and devastating economically. Our once-positive outlook for this year and the medium term has soured. We now see GDP contracting 13% in FY2020-2021 (ending in September).

What you will learn:

  • The Feb. 1 military coup in Myanmar and its impacts lead us to now forecast GDP will contract 13% in FY2020-2021 (ending in September).
  • Anti-military protests have paralyzed Myanmar’s economy, and restrictions on the internet and banking sectors have severely disrupted activity. We expect international sanctions and high political and business risks will crush exports and investment. The risks for this year and next are heavily skewed to the downside, including potential banking and balance-of-payments crises.
  • We expect the Tatmadaw (military) to remain in power, but at a huge economic cost. Growth will likely slowly recover over coming quarters, but we estimate that continued political instability and heightened security risks will lead to lower FDI inflows and investment. We see GDP still around 18% lower in 2025 than before the coup and GDP per capita around US$1000 lower.
Back to Resource Hub

Related Services

construction site

Post

Firms must brace for higher ‘new normal’ construction material prices

New research by Oxford Economics suggests that construction materials prices have shifted permanently higher due to the shocks of the past couple of years. Project managers and investors should anticipate costs being at least 15-20% higher in 2024 and onwards than in 2021.

Find Out More

Post

New Activity Trackers suggest momentum is waning

After a choppy first quarter of GDP data, our novel Activity Trackers (which incorporate proprietary daily sentiment data from Penta) suggest that economic momentum in EM Asia is on a softer trend in Q2 (at least outside of China) supporting our view of easing underlying inflationary pressures and diminishing appetite for further rate hikes.

Find Out More