Countries: Myanmar, Thailand Source: World Bank Please refer to the attached file. Earthquake compounds Myanmar’s economic challengesYANGON, June 12, 2025 — Myanmar has been severely impacted by the March earthquake, and the economic aftershocks are compounding ongoing challenges faced by firms and households, according to a new World Bank report.The World Bank’s Myanmar Economic Monitor (MEM) projects a 2.5 percent contraction in gross domestic product (GDP) in the Myanmar fiscal year 2025/26, mostly due to earthquake impacts. Direct damages to physical assets are estimated at US$11 billion, equivalent to 14 percent of GDP. The disaster affected over 17 million people in Mandalay, Sagaing, Bago, Nay Pyi Taw Union Territory, and Magway, with nine million severely impacted."The earthquake caused significant loss of life and displacement, while exacerbating already difficult economic conditions, further testing the resilience of Myanmar’s people" says Melinda Good, World Bank Division Director for Thailand and Myanmar. "Recovery efforts are essential to help the most vulnerable populations."Production across all sectors has been disrupted by factory closures, supply chain constraints, labor shortages, and damage to infrastructure. Economic output for the current fiscal year is projected to be about US$2 billion lower because of the earthquake than it would otherwise have been. The worst-affected regions (Mandalay and Nay Pyi Taw) are expected to lose about a third of their output between April and September, but a partial recovery is anticipated in the latter half of the Myanmar fiscal year, supported by reconstruction efforts.The economic aftershocks of the earthquake have struck amidst ongoing challenges related to conflict, power shortages, and trade and exchange rate restrictions. Prices continue to rise rapidly, further straining household incomes and consumption, with inflation estimated at 34.1 percent over the year to April 2025.Poverty remains high, especially among internally displaced populations. The 2024-25 Myanmar Subnational Phone Survey, conducted prior to the earthquake, estimates Myanmar's poverty rate at 31.0 percent in 2024, similar to 2023 and higher than the most recent official estimate of 24.8 percent in 2017. Simulations indicate that poverty could potentially increase by a further 2.8 percentage points due to the earthquake, further increasing household vulnerability."Myanmar’s compounding crises have put household coping mechanisms under severe stress," said Kim Edwards, Senior Economist and Program Leader for Thailand and Myanmar. "These pressures are pushing more workers into lower value-added jobs and are undermining learning outcomes among children, posing critical risks for Myanmar’s longer-term development."PRESS RELEASE NO: 2025/071/EAPContactsYangonKyaw Soe Lynn+95 9 782789400klynn@worldbank.orgWashington DCNansia Constantinou+1 202 492 0096nconstantinou@worldbankgroup.org