YANGON – The International Monetary Fund (IMF) has estimated that Myanmar’s economy will grow by an average 8 per cent in the coming years led by rising gas production and investment.
The IMF praised Myanmar for its economic reforms, but said more were needed at both policy and institutional level as the authorities’ capacity was becoming stretched.
It also warned that risks to the economy were growing due to thin external and fiscal buffers, with the underlying fiscal deficit expected to increase to around 5.5 per cent of GDP for the fiscal year ending in March next year.
Parliamentary elections due next year will be the first since President Thein Sein embarked on landmark reforms in 2011, dismantling the control of the military, which had ruled since seizing power in a 1962 coup.
The international community has re-engaged with Myanmar since the end of military rule, resulting in more investment in the country, also known as Burma.
The IMF said that the recent granting of bank licenses to foreign banks — nine were granted licenses on Oct 1 to operate on a limited basis – would present challenges.
“The entry of foreign banks will burden nascent supervisory capacity and challenge monetary and exchange rate management, particularly in the face of continuing demand-side pressures on inflation,” the IMF said.
The IMF suggested that reform efforts focus on investments in infrastructure, the expansion of education and health services, improved access to finance, improvement of the business environment and the diversifying of exports.