Myanmar Country Risk Rating

Myanmar remains rated high overall, as armed conflict and institutional breakdown continue to dominate the risk environment. Legal & regulatory risk and supply-chain disruption are both very high, while political violence, political interference and the risk of doing business are high. The military-backed political order remains deeply contested following the 2021 coup and the heavily criticised 2026 election. Armed resistance groups and ethnic organisations continue to control or contest large areas, while the military relies heavily on air strikes, artillery and restrictions on humanitarian access. In August, the United Nations said human-rights conditions had reached a new low, with millions displaced and widespread reports of abuses by both the military and armed groups. The conflict has fragmented transport networks, disrupted border trade and made the regulatory environment highly unpredictable. Sanctions and reputational risk further restrict access to international finance and investment.

Economic conditions remain severe. The World Bank estimates that GDP contracted by around 2% in FY2025/26, while inflation reached approximately 24.6% year-on-year in April 2026. Weak electricity supply, high fuel costs, declining household demand and disruption to agriculture and manufacturing continue to weigh on activity. The Middle East energy shock has added to transport and import costs, while conflict has reduced the reliability of trade routes to China, Thailand and India. Sovereign non-payment and exchange transfer risk are both medium-high. Myanmar’s external debt stock is not exceptionally large, but sanctions, foreign-exchange controls, multiple exchange rates and restrictions on international banking create major practical barriers to payment. The government’s inability to provide stimulus is medium-high, reflecting weak revenue collection, conflict spending and limited access to external finance. Banking-sector vulnerability is rated medium-low in the PRM, but this should be interpreted alongside extensive capital controls and a shallow, distorted financial system rather than as evidence of broad financial strength. Myanmar’s natural resources and strategic location offer long-term potential, but conflict, sanctions, institutional breakdown and severe supply-chain disruption mean the country will remain one of Asia’s most difficult operating environments for the foreseeable future.