YANGON, May 17, 2018 – Myanmar’s economy performed better in 2017/18 amidst growing global and domestic uncertainty, partially offsetting slower growth in 2016/17. It is estimated that Myanmar had a broad-based increase in growth of national income as well as lower inflation and improved fiscal and external balances. The Kyat appreciated slightly during 2017/18 on strong exports and FDI flows. While performance was strong and Myanmar’s economic outlook remains favorable, risks have emerged that could affect business sentiment and weaken future performance if not addressed, according to the World Bank’s Myanmar Economic Monitor released today.
Growth of Gross Domestic Product (GDP) is estimated to have increased to 6.4 percent in 2017/18 from 5.9 percent in 2016/17. This growth was driven by a recovery in agriculture and especially crop production, improved manufacturing performance, and strong services growth despite a slight slowdown likely due to tourism and banking sector uncertainties, according to the report.
“The pick-up in growth and improvement in the macroeconomic situation are encouraging,” said Ellen Goldstein, World Bank Director for Myanmar, Cambodia, and Lao PDR. “Government is also finalizing its Myanmar Sustainable Development Plan, which we hope will serve as a platform to accelerate economic reforms, modernize the financial sector and make progress in resolving conflicts that jeopardize inclusive and sustained growth.”
The report indicates a favorable outlook with growth expected to increase to 6.8 percent in 2018/19 and inflation—which moderated to 5.5 percent in 2017/18 from 7 percent in 2016/17—expected to ease further to 4.9 percent in 2018/19.
“For the economy to sustain its positive momentum amid intensifying risks, it needs well targeted public investments and private sector activity encouraged by a stable macroeconomic environment and policy certainty,” said Hans Anand Beck, World Bank Lead Economist for Myanmar. “Providing and pricing electricity well, implementing the companies act, servicing tax payers, and securing the environment for financial transactions can help in this regard.”
In addition to the regular economic review and outlook, the report contains deeper topical analysis on reforms to support inclusive growth. It suggests measures to boost investment including FDI at a time when investors perceive a slowing pace of government reforms and risks from the Rakhine crisis amplified by concerns about global trade policy and volatile commodity prices. A joint paper with the Central Statistical Organization describes Myanmar’s recent evolution of the private sector and shows how ownership, firm size and stable electricity provision affect firm productivity. Finally, the report suggests how a sound, efficient, and inclusive financial system can play a critical role in creating and sustaining a market-based economy for inclusive growth in Myanmar.
The Myanmar Economic Monitor (MEM) periodically analyzes economic developments, economic prospects, and policy priorities in Myanmar. The MEM draws on available data reported by the Government of Myanmar and additional information collected as part of the World Bank Group’s regular economic monitoring and policy dialogue.
About the World Bank Group in Myanmar
The World Bank Group plays a key role in the global effort to end extreme poverty and boost shared prosperity. After a recent review of the World Bank Group’s first full strategy for Myanmar in 30 years, the strategy has been extended to 2019, to continue to help strengthen the country’s programs and reforms that will promote growth in rural areas, invest in basic social services to provide better nutrition, health and education services, build infrastructure and create more and better jobs.