Myanmar’s Economic Growth to Recover with Improved External Environment, Continued Reforms
Myanmar’s growth should accelerate over the next couple of years on the back of firming recovery in the major industrial economies and the government’s continued reforms. Photo: ADB.
YANGON, MYANMAR (6 April 2017) — Myanmar’s growth should accelerate this year and the next, driven by a firming recovery in the major industrial economies and the government’s continued reforms, says a new Asian Development Bank (ADB) report launched today.
In its Asian Development Outlook 2017, ADB estimates Myanmar’s GDP growth slowed to 6.4% last year from 7.3% in the previous year, reflecting a weak external environment, unfavorable weather, and uncertainty about the economic policy direction during the political transition. Inflation eased, but the current account deficit worsened. ADO is ADB’s flagship annual economic publication.
Anticipating improved external factors including more favorable global commodity prices and stronger demand from trading partners, the economy is likely to recover in 2017 at around 7.7% and to 8.0% in 2018, while the current account deficit will widen with imports growing faster than exports. As growth strengthens, inflation is likely to edge up to 7.0% in 2017 and further next year.
Risks to economic growth and stability come from external shocks such as global economic and financial instabilities, international price fluctuations, much weaker economic performance of Myanmar’s major trading partners and investors, and unexpected adverse weather conditions. Potential domestic risks include unclear and inconsistent policy directions, excessive credit growth, delays in implementing reform initiatives, and disruptions to social stability.
“With risks mitigated, Myanmar should be able to get back and stay on a robust economic growth path in the medium-term,” said Yumiko Tamura, Principal Country Specialist and Officer-in-Charge of ADB’s Myanmar Resident Mission. “We are hopeful that the government’s continued effort on structural and institutional reforms will help strengthen the growth momentum. ADB stands ready to contribute to fostering inclusive and sustainable development in Myanmar.”
The recent government effort in strengthening the legal and regulatory framework has helped enhance the conducive environment for private businesses and investments, which will in turn drive further economic growth. Consolidating the country’s legal and regulatory framework is crucial to develop a vibrant private sector and tap Myanmar’s huge growth potential, the report says.
ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, ADB is celebrating 50 years of development partnership in the region. It is owned by 67 members—48 from the region.