YANGON, November 6, 2013 – This first edition of the Myanmar Economic Monitor (MEM) reports that growth in 2012/13 was strong at 6.5 percent driven mainly by strong performance in gas production, services, construction, foreign direct investment, and commodity exports. It also indicates that the outlook in the short to medium term remains positive although there are risks, both on the domestic as well as external fronts. It also reports that inflation has been on the rise in recent months, reaching 7.3 percent in August, on account of increasing food costs and housing rental costs. The MEM further observes that in recent months the nominal and real effective exchange rates have been depreciating which helps to make Myanmar’s exports more competitive. However, these indicators appear to have started appreciating in August, which could erode Myanmar’s export competitiveness.
“We believe by periodically bringing most recent economic data and analysis on development issues to government policy makers, think- tanks, civil society and citizens, the World Bank can contribute to informed debates and decision making on development policy within a rapidly changing Myanmar,” said Kanthan Shankar, World Bank Country Manager for Myanmar.
The World Bank’s Myanmar Economic Monitor looks at recent macroeconomic developments, recently implemented and planned policy reforms, and includes a special feature article. In this first edition, the special feature section presents a summary of the findings from the Public Expenditure and Financial Accountability assessment (PEFA) of Myanmar that was completed earlier this year. The Bank plans to produce the MEM every six months. Its timing will coincide with the bi-annual East Asia and Pacific (EAP) update also produced by the Bank which started featuring Myanmar last year. The second EAP update for 2013 was recently launched in Singapore by Bert Hofman, the World Bank’s regional Chief Economist.
“By producing the Myanmar Economic Monitor, we hope to contribute towards providing data and information on recent economic and policy developments in the country as well as outlook going forward that various groups will find useful,” said Khwima Nthara, the World Bank’s Senior Country Economist for Myanmar.
“Rising inflation is always a cause for concern since it hurts the poor disproportionately, but economies do sometimes experience rising inflation, especially when in transition as is the case in Myanmar. However, there is no cause for alarm yet because inflation remains in single digits in Myanmar. Nonetheless, it will be important for the authorities to keep a close eye on the situation so that it does not get out of hand,” said May Thet Zin, the World Bank’s Country Economist for Myanmar.
The MEM also notes that the various reforms recently undertaken by the Government and planned reforms appropriately focus on improving the environment for business in the country. These include the removal of import and export licensing requirements on some 600 products, the approval of new regulations on foreign investment to provide greater clarity to some aspects of the new Foreign Investment Law enacted last year, the granting of licenses to private insurance companies for the first time in 50 years, and the enactment of the anti-corruption law, just to mention a few.