Myanmar’s economy declines despite junta claims of progress

Min Aung Hlaing recently told a Russian news agency that Myanmar’s economy was on an upward trajectory, but the value of the country’s currency plummeted in the days following the coup leader’s comments. During a private March 18 interview with ITAR-TASS media in the military-controlled capital of Naypyitaw, the junta chief said that a decline in Myanmar’s economy had been in place since 2018 due to “mismanagement” by the elected civilian National League for Democracy (NLD) government, whose administration his army ousted in a 2021 coup. He claimed that the country’s economic outlook was positive since his military council had taken control. Earlier this year, the Myanmar kyat was valued at 3,370 to the US dollar, but by early April had depreciated by 16 percent to 3,900 kyat per dollar. The price of gold also went up by 22 percent during the same period, from 3.7 million kyat per kyattha—a local unit of measurement equal to half an ounce or just over 16 grams—to 4.5m kyat. Prior to the military coup in February 2021, the kyat to dollar exchange rate was 1,300, and one kyattha of gold was worth 1.3m kyat. Economic observers have speculated that the rise in gold prices, the slowing of border trade, and increased demand for foreign currency could have contributed to the decline in the kyat’s value. A trader from Mandalay told Myanmar Now that Chinese yuan exchange rates had also increased from around 470 kyat per yuan to 518. This, he said, was due to the halt to trade with Myanmar’s northern neighbour following prolonged clashes with resistance forces in northern Shan State, and the instability surrounding the junta’s recent decision to enforce the conscription of young men. China-Myanmar border crossings in Muse and Chin Shwe Haw in Shan State and Loi Je (Lweje) in Kachin State remain closed, and limited goods have reportedly been passing through Kampaiti in Kachin State. The junta has limited the number of foreign imports procured using US dollars and requires transactions borders to use local currencies, such as yuan or Thai baht. A maize trader from Myawaddy, on Karen State’s border with Thailand, said that economic difficulties had been exacerbated by long waits to be granted import permits, often exceeding a year. “The military has restricted imports and exports, which has caused an increase in commodity prices,” he told Myanmar Now, adding that those who are able to do so have sold their property and left the country. The trader from Mandalay confirmed that without these permits, “people have to smuggle goods [into Myanmar], which raises the prices.” Between Kawkareik and Myawaddy townships, a landslide recently damaged a section of the Asia Highway—a major trade route to the Thai border—forcing export to Thailand to be carried out at points in Tanintharyi Region, such as Kawthaung, resulting in longer shipping times and higher costs. The recent fiscal year’s income from foreign trade dropped by more than 11 percent compared to the previous year, according to data from the junta’s ministry of economics and commerce. Records showed US$29.4 billion in imports and exports during the 2023-2024 period as of March 22—a figure more than $3.7b less than the previous year. The junta-controlled Central Bank announced that it had sold more than $241m on the public market between January and March. “The Central Bank sold those US dollars on the public market not because they had the best interest of the public in mind but because they wanted their partner businesses to get those dollars,” an economic expert told Myanmar Now on the condition of anonymity.

Myanmar’s economy declines despite junta claims of progress

The value of the kyat plummets to a record-breaking low after the junta chief boasts to Russian media of economic growth

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