Myanmar recovery dented by devastating quake, World Bank
Prior to the earthquake, which left 3,800 people dead and 207,000 people displaced, the World Bank had forecast a 2% expansion this year. - AFP
YANGON: Myanmar's economy is headed for its worst performance since the pandemic as the strife-torn country reels from the impact of a devastating earthquake in March that's estimated to have caused US$11 billion in damage, according to the World Bank.
The 7.7 magnitude earthquake on March 28 affected more than 17 million people and wrecked widespread damages to residential buildings, public infrastructure and heritage sites in areas accounting for about one-third of Myanmar's gross domestic product.
The impact of the quake still continues to disrupt lives and livelihood, "exacerbating the already very difficult conditions in the affected areas,' the bank said in a report on Thursday (June 12).
The dent to economic output due to the earthquake will be equivalent to about 4% of Myanmar's GDP in the fiscal year ending March 2026, the development bank estimated.
The economy will contract 2.5% in 2025-26 before rebounding to a growth of 3% the following year due to rebuilding efforts and the low base, it said.
Prior to the earthquake, which left 3,800 people dead and 207,000 people displaced in townships including Mandalay and Naypyidaw, the World Bank had forecast a 2% expansion this year. The worst-affected regions are expected to lose about a third of their production between April and September, it said.
"The economic aftershocks of the earthquake have struck on the back of ongoing challenges from conflict,' the World Bank said.
The South-East Asian nation has been struggling with a civil war, stinging inflation and a shortage of dollars since the military seized power in 2021 February.
A raging conflict between rebel groups fighting for independence and the regime has displaced about 3.5 million people, the lender said, citing United Nations estimates.
Inflation, which quickened to 34.1% in the year to April, may remain high at around 31% in the current fiscal year due to supply-chain disruptions associated with the quake and conflict-related logistics challenges.
The poverty rate may climb 2.8 percentage points from an already high ratio of 31% last year, according to the World Bank.
Myanmar's budget deficit is seen widening to 6.9% by the end of March next year, up from 5.1% a year earlier with much of the deficit funding coming from the central bank, the report said.
"The earthquake caused significant loss of life and displacement, while exacerbating already difficult economic conditions, further testing the resilience of Myanmar's people' Melinda Good, World Bank Division Director for Thailand and Myanmar said in a statement.
"Recovery efforts are essential to help the most vulnerable populations.' - Bloomberg
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Star
an hour ago
- The Star
Philippines acquires 12 FA-50 combat jets from South Korea
A Philippine Air Force FA-50 (left) and US Air Force F-16 fighter jet (right) fly in formation during the US-Philippines joint air force military exercise dubbed 'Cope Thunder' at Basa Air Base in Pampanga on April 11, 2024. - Photo: AFP file MANILA: The Department of National Defence (DND) announced on Saturday (June 14) the acquisition of 12 FA-50 Block 70 light combat aircraft from Korea Aerospace Industries, Ltd. (KAI). The DND and the South Korean manufacturer sealed a deal earlier this month, formalising the contract valued at more than US$700 million. The comprehensive package includes mission equipment, integrated logistics support, and a training and logistics information system. The Korea-made combat jet represents the latest evolution of the FA-50 platform, featuring advanced avionics, modern radar systems, and extended operational range. 'Its acquisition marks a significant enhancement to the country's air defence capabilities and aligns with the DND's Comprehensive Archipelagic Defence Concept,' the DND said. The department said this underscores the Philippine government's 'continued commitment to national defence' and further strengthens its bilateral defence cooperation with South Korea. The delivery of the aircraft will be carried out in phases over the next five years, with full completion targeted by 2030. The DND earlier acquired 12 FA-50 aircraft from KAI for PHP18.9 billion under the AFP Modernisation Programme. - Philippine Daily Inquirer/ANN
The Star
2 hours ago
- The Star
With tragic plane crash, Air India's revamp to take longer
BENGALURU, (India): The crash of the London-bound Air India flight in Ahmedabad on Thursday (June 12) that left more than 265 dead could slow the erstwhile national carrier's plans to expand and revive its reputation and profitability. This is because it must turn its attention now to restoring internal morale and consumer confidence after the tragic accident. Officials are still investigating why AI171 crashed, but it is the airline's first wide-body aircraft accident in 40 years. The Tata Group bought the carrier from the Indian government in 2022. For Air India, which posted an operational profit in early June after decades of losses and hoped to reach full profitability by 2027, the crash changes many plans. The incident could result in significant losses for Air India not only because all except one of the 242 passengers were killed, but also because the airline may be held liable for the plane's plunge onto a medical hostel in a residential area. After the accident, Tata Sons chairman N. Chandrasekaran announced compensation of 10 million rupees (S$148,900) to the families of each person who lost their life. He also promised to cover the medical expenses of those injured and help reconstruct the B.J. Medical hostel the plane fell on. The airline is suffused with nostalgia with its turbaned Maharaja mascot and delicious Indian meals, and unsmiling but efficient crew. In recent years, however, it has become a butt of passenger ridicule for persistent delays, poorly maintained planes and years of losses. Under Tata ownership, Air India's chief executive Campbell Wilson is helming a five-year intensive transformation plan beginning in 2022 to revamp an ageing and outdated fleet, upskill staff, upgrade IT systems, and create a world-class airline on a par with rivals like Emirates. Air India's losses had been reduced by more than 40 per cent since the privatisation in January 2022 as it aimed to break even. It flew a total of 43.5 million passengers during the financial year April 2024 to March 2025. In April 2025, Air India announced a US$400 million (S$513.5 million) fleet upgrade programme for 106 of its 198 aircraft. This involved refurbishing seats, carpets, curtains and lavatories. The full-service carrier, which started making money in 2025, had made financial gains reportedly from cost cutting and streamlining operations, aided by lower fuel costs and a surge in passenger numbers. Sources close to the company said the airline was eyeing full profitability by 2027 once the low-cost arm of the group, Air India Express, which has been expanding its fleet, also increases its revenue. Wilson, a former CEO of Scoot, had reportedly informed employees during a townhall in June that Air India was advancing towards becoming 'a self-sustaining company'. The crash changes, if not all the well-laid plans, many of them. 'We are devastated. All of us are wondering what went wrong,' an Air India pilot, who has worked at the company for over 15 years, told ST, requesting anonymity. Aviation expert Sanjay Lazar, chief executive of Availalaz Consultants in Mumbai, said: 'A tragedy like this strikes at the heart of an airline. It will set the company back tremendously, as crashes do. 'The morale of personnel and external consumer trust will have to be rebuilt.' This is the first accident of an Air India wide-body aircraft since 1985, said Mr Lazar. The last Air India hull loss – which means an aviation accident that damages the aircraft beyond repair – was on June 23, 1985, when a London/Mumbai-bound flight from Montreal exploded due to a bomb planted by a Canadian Sikh terror group. Just 17 years old at the time, Lazar had lost his entire family in the 1985 crash, after which he trained to be a pilot and worked at Air India for 38 years. 'From 1985 to 2025, there has been no hull loss for Air India. Strong companies bounce back. Air India has a good safety record and robust systems that must be reinforced like in the past,' he told ST. Beyond the aftermath of the crash, headwinds in the form of trade tariffs imposed by the US, tensions on the India-Pakistan border and airspace closures from conflicts in other parts of the world such as the ongoing bombing of Iran by Israel remain concerns for the airline. Wilson told The Hindu in May that Air India has requested a subsidy worth US$600 million annually from the government to tide it over the financial hit from the closure of Pakistan's airspace and the resultant re-routings undertaken by the airline for its westbound flights. Relatives and hospital staff carry the body of a victim who died in an airplane crash in Ahmedabad, Gujarat, western India. - Photo: EPA-EFE The airspace closure in Iran worsens this situation. While the reason for the crash is yet unknown, it could also affect the aviation sector temporarily, as passengers put off travel, fearing the worst. The crash of the 12-year-old 787 Dreamliner has refuelled scrutiny of Boeing, whose safety reputation began to unravel in October 2018 when a Lion Air flight operating a 737 Max crashed due to a malfunction, killing 189 people. Just months later, in March 2019, an Ethiopian Airlines flight using the same aircraft model crashed for the same reason, killing all 157 people aboard. But until now, the 787 Dreamliner aircraft had maintained a relatively strong safety record, said aviation professional Hemanth D.P. Boeing's 787 was launched in 2011, and there are around 1,100 in the world. Air India owns an estimated 35 of them, not including the one that crashed. Some Indian media reports said the Ministry of Civil Aviation was considering grounding 787s for a safety review. Shortly after the crash, shares of Tata Group's companies saw an increase in selling pressure on June 12. However, analysts said it was sentiment-driven and that the long-term impact of the crash may be limited only to the Tata-owned airline business, and not extend to other entities. Air India operates as a standalone entity, and any liabilities arising from the crash, be it aircraft damage, compensation or lawsuits, are expected to be covered through aviation insurance, analysts who track aviation finance and safety told ST. Shares of Singapore Airlines, which holds a 25.1 per cent stake in Air India, dropped by 1.7 per cent on the Singapore Exchange. - The Straits Times/ANN
The Star
2 hours ago
- The Star
Laos pushes to increase exports, earning US$977mil in five months of 2025
VIENTIANE: Laos earned US$977 million from agricultural exports in the first five months of 2025, reaching 65 percent of the Lao National Assembly's annual target of US$1.5 billion. The Lao government is accelerating efforts to strengthen agricultural exports and enforce stricter oversight of the mining industry in a bid to reduce import dependency, expand trade, and ensure sustainable economic development. Speaking at the ninth ordinary session of the Lao National Assembly's ninth legislature on Monday (June 9), Lao Prime Minister Sonexay Siphandone highlighted key achievements in agriculture and mining as part of the country's strategy to reduce import dependency and promote sustainable economic growth. To boost export competitiveness, the Lao government is expediting the construction of a modern slaughterhouse that meets international standards. This facility is expected to enhance the quality and marketability of the country's meat exports. In parallel with its agricultural initiatives, the government is intensifying oversight of the mining sector. In his speech, Sonexay reaffirmed the government's commitment to economic diversification and sustainable development, pledging continued reforms in both agriculture and natural resource management. - Xinhua
