Policy reform allowed rapid economic growth in the closing fiscal year of Myanmar and is expected to drive stronger expansion through the forecast period. Inflation will likely accelerate as well, and stresses are seen building in fiscal and external accounts. A key challenge is to develop the country’s human resources, in particular by better equipping its young people for roles in a modern economy.
|Selected economic indicators (%) - Myanmar||2015||2016|
|Current Account Balance (share of GDP)||-6.8||-5.0|
Source: ADB estimates.
Growth in Myanmar’s gross domestic product is estimated at 7.7% in Fiscal Year 2014 (ending 31 March 2015), reflecting strong expansion in construction, manufacturing, and services. The government’s ambitious structural reform program has underpinned the strong growth performance in recent years.
Construction was driven by government investment in infrastructure, and property development in Yangon and Mandalay. Manufacturing benefitted from increasing flows of foreign direct investment, with more than one new garment factory opening per week on average in 2014. Growth in services was bolstered by a surge in tourist arrivals from 2.0 million in 2013 to an estimated 3.1 million in 2014.
After moderating in FY2014, growth is forecast to accelerate to 8.3% in FY2015 and remain close to this pace in FY2016 as it is propelled by investment stimulated by structural reform, an improved business environment, and Myanmar’s gradual integration into the subregion.
Better prospects in neighboring India and Thailand - and further afield in the major industrial economies - support the outlook for Myanmar but are partly offset by a slowdown in the People’s Republic of China.
Excerpted from the Asian Development Outlook 2015.