Myanmar’s economy is expected to contract due to the heavy impact of flooding and fighting, according to the World Bank.

BANGKOK– Myanmar’s economy is expected to contract this year, the World Bank said Wednesday, as flooding and fighting took a toll nearly four years after the military toppled the elected government led by Aung San Suu Kyi .

In an update released Wednesday, the bank said that about a fifth of all structures built and a tenth of from Myanmar the roads had been damaged by widespread flooding during the heavy monsoon rains and the typhoon that swept the country in September. About 2 million people were left homeless, according to the report.

Meanwhile, fighting between the army and opposition forces stay fierce in parts of the country, disrupting agriculture and manufacturing.

“The level and intensity of armed conflict remains high, severely affecting lives and livelihoods, disrupting production and supply chains and increasing uncertainty around the economic outlook,” it said.

Overall, the report said the economy will likely contract by 1% in annual terms in the April-March fiscal year.

Pro-democracy guerrillas and the armed forces of ethnic minorities seeking autonomy are fighting against Burmese Army after taking power in early 2021, when generals overthrew the elected government of Aung San Suu Kyi

The United Nations estimates that 3.5 million people, or about 6 percent of the population, have been displaced from their homes, more than half of the country’s townships are in conflict, and construction of major projects has been delayed, the report said.

The UN special envoy for Myanmar recently warned that the Southeast Asian country was in crisis, with escalating conflictcriminal networks “out of control” and human suffering at unprecedented levels.

Julie Bishop, former Australian foreign minister, warned that Myanmar risks becoming a “forgotten crisis”.

In addition to the unrest, disruptions from the conflict helped weaken the value of Myanmar’s currency, the kyat, which lost 40 percent of its value against the dollar in informal trading during the first eight months of the year, according to the World Bank report.

This helped push inflation to more than 25%, while food prices rose more than 60% between April and September, the report said.

International tourist arrivals are about a fifth of the level before the twin shocks of the COVID-19 pandemic and the military takeover, and the manufacturing sector has also weakened, power cuts disrupting production.

Myanmar’s military administration stopped publishing trade data in mid-2024, the report said, but an analysis of data from its trading partners showed that exports of clothing and natural gas, which account for a significant share of all its exports, fell by more than 11% in 2024. April-September compared to a year earlier.

The report’s assessment of the outlook predicts a further deterioration of conditions if fighting intensifies.