Myanmar’s economy to grow at 6.5 per cent, says World Bank

MYANMAR’S economy is slowly regaining stability and picking up speed, according to a new World Bank report.

 

The World Bank’s Myanmar Economic Monitor Building Reform Momentum report, launched on 18 June said Myanmar’s economy is expected to grow at 6.5 per cent in 2018/19. Growth continues to be broad-based, supported by the industrial and service sectors. Industrial activities revived, supported by strong performance in the garment sector and construction activities, said the report.

 

Services remain the key driver of growth with momentum building in the wholesale and retail sector supported by reforms. However, large disparities in welfare persist across the country, said the world Bank.

 

“Acceleration of the reform agenda as envisioned in the Myanmar Sustainable Development Plan, along with targeted public investments and private sector participation, will lead to a consolidation of macroeconomic stability and help Myanmar maintain its momentum and meet its long-term growth targets,” said Gevorg Sargsyan, Head of Office, World Bank Myanmar.

 

The report includes an analysis drawing on the Multidimensional Welfare Indicator (MDI), prepared with the government, which indicates that most of the population in Myanmar faces overlapping disadvantages, with large disparities in welfare apparent at the state, region and township level.

 

With growth expected to rise to 6.7 per cent in 2020/21, the World Bank report projects a positive outlook for Myanmar’s economy despite a deteriorating global environment, due to accelerated implementation of reforms, infrastructure spending and investment in sectors such as wholesale and retail, insurance and banking that are undergoing liberalization.

 

The external risks to the economic outlook include slowing global and regional growth and escalation of trade tensions and possible revocation of preferential EU market access. Inflation is expected to stabilize at 6.6 per cent in the medium term.

 

The report notes that inflationary pressures could increase due to volatile global energy prices and the possibility that the government may increases electricity tariffs to bring them in line with the cost of power production.

 

“There are signs that market sentiment is rising due to the new laws being passed and starting to be implemented,” said Hans Anand Beck, Lead Economist, World Bank Myanmar. “Keeping these reforms going will be critical to continued economic momentum, for example through insurance liberalization, tax reform, and transparent investments in the power sector.”

 

In the power sector, the report argues that Myanmar needs to invest twice as much and implement projects three times faster to meet growing demand. The Myanmar Economic Monitor is a biannual analysis of economic developments, economic prospects and policy priorities in Myanmar.

 

The publication 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.— GNLM