Myanmar’s economy continues to show resilience despite the global slowdown and domestic uncertainties.
- Using 2015/2016 as a new GDP base year, Myanmar’s economy is expected to grow at 6.3 percent in 2018/19 from 6.2 percent in 2017/2018.
- The service sector is the main driver of growth, expected to grow by 8.4 percent in 2018/2019. A slow recovery in tourism related services is offset by continued robust growth in wholesale and retail trade. The industrial sector is expected to grow by 6.4 percent in 2018/2019, on the back of strong manufacturing growth offsetting slower growth in construction. Despite seasonal floods and volatile demand, agriculture output growth is projected to be stable at 1.6 percent in 2018/2019, with greater diversification in production and export destinations.
- Headline inflation increased to double digits in July 2019, largely due to the confluence of supply factors and recent electricity price increase. Inflation rose from 9.5 percent in June to 10.9 percent (year on year) in July before easing to 10.4 percent in August.
Economic Outlook and Risks
- Myanmar’s economic outlook remains stable. Growth in 2019/2020 is expected to growth at 6.4 percent in 2019/2020, driven by robust domestic demand. Investment growth in transport and telecommunication will sustain, as government’s plan on infrastructure spending in the lead up to the 2020 elections.
- Downside risks include: Slowing global and regional growth, especially in China, together with global trade tensions, could also transmit to Myanmar through the trade channel by slowing external demand and inbound foreign investments. Insecurity in border areas with violence and forced displacement of refugees in Rakhine, and uncertainty from legal proceedings in international courts could affect investors’ sentiment. Based on international experience, the 2020 general elections could add another source of uncertainty.
Special Topic Findings
- Myanmar climbed up the Doing Business ranking from 171/190 to 165/190, according to the World Bank’s 2020 Doing Business report. However, Myanmar’s rapidly growing private sector is hampered by low productivity. Firms need greater access to factors inputs, better connectivity, and an enabling business environment to support a responsible private sector. The presence of armed actors and conflicts add additional challenges for businesses in one-third of Myanmar.