As the post-coup situation in Myanmar worsens investors have suspended or cancelled major infrastructure projects, causing a “very large contraction” in the country’s construction market with the prospect of growth pushed back to the second half of the decade, according to Fitch Solutions Country Risk & Industry Research.
The country faces economic collapse as the value of its currency lost 60% of its value since the start of September. The UN Security Council has appealed for peace as the country’s military, which seized power in February, escalated hostilities against rebel forces in Chin state and in Magway and Sagaing regions.
As examples of investors fleeing, Fitch cited Hong Kong’s VPower Group pulling out of two operational LNG power plants and Adani Ports withdrawing from its investment in the Ahlone International Port Terminal project.
“We continue to expect businesses with the ability to halt investments will likely do so, if not liquidate their assets and withdraw their funds altogether,” Fitch said, adding that most projects stalled in Myanmar this year except a few large China-backed schemes.
“Growth will start to pick up toward the second half of the decade as the situation eventually stabilises, regardless of what the political outcome may be,” Fitch said.