The World Bank on Monday (Feb 1) said it was gravely concerned about the current situation in Myanmar and a military takeover of power, warning the events risked a major setback to the country's transition and its development prospects.

"We are concerned about the safety and security of people in Myanmar, including our staff and partners, and are troubled by the shutdown of communications channels both within Myanmar and with the outside world," the bank said in a statement issued late on Monday.

Myanmar's army on Monday handed power to military chief General Min Aung Hlaing and imposed a year-long state of emergency, saying it had responded to what it called election fraud.

The move sparked condemnation from Western leaders and a threat of renewed sanctions by the United States government, and raised questions about the outlook for a million Rohingya refugees.

The World Bank said it had been a committed partner in supporting Myanmar's transition to democracy for the past decade, as well as its efforts to achieve broad-based sustainable growth and increased social inclusion.

"We remain committed to these goals. Our thoughts are with the people of Myanmar," the statement said.

The bank's website lists US$900 million (S$1.2 billion) in World Bank lending commitments to Myanmar in 2020, and US$616 milliion in 2017.

It cited what it called measurable improvements in social welfare since the country's opening in 2011, with poverty falling to 25 per cent in 2017 from 48 per cent in 2005.

Reform momentum slowed after 2016 as a newly elected civilian government grappled with defining its economic vision, the Bank, although it said the government had recently adopted an ambitious sustainable development plan and reinvigorated its economic reform agenda.

Economic growth was slated to drop to just 0.5 per cent in fiscal year 2019/20 from 6.8 per cent a year earlier, the bank said, although it said the economy could contract as much as 2.5 per cent if the Covid-19 pandemic was protracted.