Myanmar Economic Outlook Hit by Fuel Price Shock as World Bank Cuts Growth Forecast

Myanmar’s economy is showing signs of stabilization, but a recent surge in global fuel prices has created fresh challenges for the conflict-ridden nation, prompting the World Bank to lower its economic growth forecast.

According to the latest Myanmar Economic Monitor report released by the World Bank, Myanmar’s real GDP growth is now expected to reach just 2.0% in the 2026/27 fiscal year, which began in April. This marks a downgrade from the previous 3.0% projection made before the escalation of conflict in the Middle East triggered a global energy price shock.

The World Bank also estimated that Myanmar’s economy contracted by 2.0% during the 2025/26 fiscal year, highlighting the ongoing economic difficulties facing the country.

Melinda Good, the World Bank’s Division Director for Thailand and Myanmar, said that while some economic indicators suggest conditions have stabilized, Myanmar continues to face severe structural and political challenges. She noted that recurring shocks have exposed underlying weaknesses that could limit any sustainable recovery.

The report emphasized that rising fuel prices have increased transportation, logistics, production, and distribution costs across the economy. Higher energy costs have also intensified demand for foreign currency to pay for fuel imports, placing additional pressure on Myanmar’s already fragile financial system.

Even before the latest fuel price surge, key economic indicators—including business output, sales, and profits—remained below levels recorded before the military coup in 2021 and the devastating earthquake that struck the country in March 2025.

The World Bank identified several risks that could further weaken Myanmar’s economic outlook, including ongoing civil conflict, disruptions to trade and supply chains, volatile energy markets, and weaker export revenues.

Myanmar has remained politically and economically unstable since the military seized power in February 2021, ousting the elected government led by Nobel Peace Prize laureate Aung San Suu Kyi. The coup sparked widespread protests that later evolved into an armed resistance movement against military rule.

Economic recovery efforts suffered another setback after a powerful earthquake caused extensive damage in March 2025. While conditions showed modest improvement in early 2026, the recent rise in global energy prices has once again undermined growth prospects.

In April, former junta leader Min Aung Hlaing assumed the presidency following a military-backed election that excluded major opposition groups and was widely criticized by the international community.

As Myanmar grapples with political instability, civil war, and external economic pressures, the country’s path toward recovery remains uncertain despite signs of limited stabilization.