“As the nation’s conscripts-to-be left, the local demand for dollars pushed the kyat lower.” During the past year, we have seen food prices rise by over fifty percent. At home prices have gone up again significantly–so much so that even the official news media covered them. Yet the figures are wholesale, which in turn means a larger impact on consumers than would be otherwise necessary.
In Image: A Retail Shop by the Lake selling foods and ornaments
Myanmar’s protracted political upheaval, along with a military government that has been in power, has exerted a substantial impact on the country’s economy. In particular it has seen the devaluation of its currency, the kyat, with all that implies for living standards. With a sharply falling kyat and soaring prices Myanmar’s economy is in an increasingly bad way. This blog looks at the economic difficulties now facing Myanmar, broadly viewed to include the depreciation of (or continued inflation in) its own currency, and wider effects on ordinary lives of the people who call it home.
The Kyat’s Decline
In recent years, the kyat has plunged in value. Since the military takeover in February 2021, the currency has lost about 70 percent of its value and recently plummeted to about 4,000 kyat against the dollar. This steep drop is a clear indication of a significant depreciation of the kyat, and virtually identical with the lows in late August 2022. While the government has tried to manage the markets, including through the sale of foreign currency and new regulations, the kyat remains weak.
The kyat gained in 2024 after the Myanmar Central Bank took around 20 measures to improve it. Among those tactics was the sale of foreign currency on the market, including dollars, Thai baht and Chinese yuan. Yet measures to halt the declining value of the currency have not been wholly successful. Their evolution of policy is captured in the central bank’s current approach, which downplays the need for currency swaps and tougher controls on money changers that were once part of efforts to manage a tightening economy.
In Image: Myammar National Flag
A relentless plunge of the national currency has wrecked Myanmar’s economy and daily life. The soaring import prices and prices of know goods are a gaalconomic burden on the people. Companies must pass on higher operating costs to customers. This economic deprivation has hit those on a certain income the worst; those on fixed or low incomes trying to scratch and claw to keep pace with the skyrocketed prices of food, gasoline and medicine.
And economic uncertainty compounds broader social and political challenges. And that declining value of the kyat will likely be accompanied by ever increasing public annoyance, putting further pressure on the military-led administration. Only the decline in inflation and suffering have made achieving political stability and economic recovery all that much more difficult. The kyat and Myanmar’s economy are now in limbo, and their fate will depend on a cocktail of local and global developments: global macroeconomic state of play and geopolitical direction.
Growing Prices and Inflation
But perhaps the most pressing of difficulties is that brought about by the great inflation-fire generated from dropping the value of the kyat. This country, Myanmar; in one year period alone Adventist Development And Relief Agency funded rice almost three times more expensiveIn state media the price figures have been publicized. But actually they really do not reflect how it affects the consumer, they are supposed toAs a result of the rising cost of living, the average resident who can ill afford it is now paying much more for things.
Persistently canvassing businessmen–let me create a new listing out of thatTraffic of nearly all types of cargo has increased sharply in the past three years. Kyat devaluation has forced local firms to push the burden–higher prices–more on consumers. The result of this has been significant price rises in a number of areas. All increased can be covered by operators adding on more “potatoes”, as the phrase goes. However, the consumer gets squeezed.
While in much the same way the doubling or even tripling in cost of medical supplies is further burdening people and households.”‘I’ve declined offers to go out and eat, and I’ve had to sell my gold and jewels to cover the cost of drugs on several occasions,” said one lady if arthritis as she talked about her own experience. Her story illustrates the impact that rising medical bills have on people’s daily lives.
These price increases pose a potential problem for companies as well as certain customers. When businesses which are hard put to keep afloat their own operating costs are forced to pass these increases on to customers, it creates a vicious cycle of rising prices. Poor people have the greatest difficulty carrying the financial load, for their consumption power is reduced along with an upward fitting process complicated by having your sword broken on Inflationary pressures such as these have broader consequences;
There are economic reasons why this could derail development and make the existing period of extremely severe economic difficulties at least as bad as ever. So as the cost of living goes upward and continues its inexorable climb, the pressing need for urgent economic re-Capitalists and measures of stabilization.
The Relationship Between Political Unrest and Conscription
In Image: Two woman riding in a boat
The military draft which has been in effect since February 10th has only worsened the economic situation in Myanmar. Young people are crossing borders to avoid the draft in ever-increasing numbers, which naturally drives up demand for foreign currency such as dollars and baht. Following the exodus, banks adjusted their already-unsound exchange rates further upwards as well.
Another factor which adds to the uncertain economic outlook in Myanmar is the continuous war between armed ethnic groups and the central government. Conflict has grown more intense since October, with no sign in sight of a resolution. The military government, faced wtih turbulence, has relaxed some of the earlier controls on currency exchange rates in an attempt to get the economy going. Nevertheless, local companies have had to raise prices as the kyat continues its declining course, with the result that customers suffer.
Economic Repercussions of Kyat Depreciation: Key Challenges and Impacts
- Inflation Shock: A leap in inflation because of the kyat’s steep depreciation has caused a jump of more than 50% in food prices over the last year.With statistics based on factory price, major media coverage has not fully reflected the real impact on consumers:Those further up the production chain will inevitably raise prices to cover their burgeoning costs.
- While this is usually invisible to the general public, it manifests as soaring prices at the gas pumps (reflecting heavy dues passed onto consumers by extractors and refiners). At the same time, the cost of medical supplies has multiplied two, three times from what it used as Rafik recounted, putting an ever heavier burden on families.
- Pressure on Personal Finances: Growing living costs are creating a heavy burden for everyone. A young woman who has arthritis said of her own hardships how she had to sell off belongings and eat out less frequently to pay for drugs especially because they were becoming so expensive.
- Extending Economic Effect: Growing costs and inflation not only touch families, but just like moving magnetic dust around they also stick to industry companies as a whole. An economy coming under more and more pressure as prices rise while the power of money to buy things falls, has the power to stifle economic vitality and worsen Myanmar’s economic plight beyond all remedy–clearly there is a pressing need for effective counter-measures.
The Price in Humans
The economic turmoil has affected the daily lives of all Myanmar’s people. Nowadays, it is a common problem for many to make ends meet because the costs associated with food and clothes have skyrocketed dramatically. The purchase of medicine has become difficult and healthcare survival is under threat. The cost of healthcare is rising and supplies limited. People with chronic diseases requiring medication are also faced with significant financial difficulties.Economic strains have companies nettled.
This is because, in order to shoulder broken production lines, the consumer’s financial burden is increased: numerous commodity prices have been increased.New laws and regulations, an upswing in prices and a falling currency value increase the difficulties faced by both consumers and producers of goods alike.The human cost of such economic turbulence is not only financial. Many people are forced to make hard decisions because of money troubles, like cutting their non-essential expenditures or going without important commodities.
When families are forced to put essential spending before discretionary outlays it undermines their standard of life and heightens a sense of financial insecurity vividly. Indeed the whole economic cycle revolves around this phenomenon. Thus the inability to pay for proper healthcare is both a public health disaster and a financial burden. Widespread economic deprivation is destroying social cohesion. Mental tension is rising. All-encompassing support networks have become an urgent need.
Political unpredictability, declining currency values, and higher prices are intertwined causes of Myanmar’s economic ills.As the value of the kyat nosedives, inflation cascades upwards. It results in manifest changes in people’s lives: food and petrol rise sharply in price, basic living costs increase, even medical supplies are impacted by this huge increase in real costs.
Final Thoughts
The high volatility of the economy produced by political unrest and the drafting of ever more men by the military authorities has only made things worse. “These problems may be subsiding slowly and may not have been fully resolved by the government and the central bank. Nevertheless, the current economic state is one hard reality which has a big influence over many people’s daily lives in Myanmar.
“While the relationship between economic outcomes and political decisions demonstrates the complexity of the situation and how important it is to keep both comfort and care coming to those impacted by crisis, assistance is needed now!”