According to a report issued by the Asian Development Bank (ADB), named Myanmar's Economic Outlook 2016, the Myanmar economy is forecast to take an upturn.
Economic growth is slated to reach 8.4% in FY 2016-17, up from 7.2% in FY 2015-16. Inflation was at 11% in the previous year, with both negative aspects attributed to the widespread floods throughout Myanmar. That figure is estimated to remain around 9.5% in 2016-17 but should fall to 8.5% in FY 2017-18.
Mr. Winfried Wicklein, ADB country director for Myanmar, said that while the economic changes which began in 2011 have borne positive results, the new government in office has to contend with many challenges. Among them are advancing economic reform, addressing infrastructure and labor shortages and making progress towards peace and social cohesion.
He further stated that intensified efforts are necessary to connect and develop rural areas to improve access to markets and services as well as generating job opportunites.
Mr. Peter Brimble, Deputy Country Representative of the ADB in Myanmar, said that it is a deep concern for the new Myanmar government when its major trade partner, China, is itself facing an economy downturn. He warned that the developing countries within the region need to be acutely aware of this impending issue.
However, India, Myanmar's other giant neighbor is currently enjoying healthy growth. Paradoxically, Myanmar's trade with India fell to 4% of the total foreign trade figures within FY 2015-16, whereas it used to be around 7% in the preceding years. In sharp comparison, trade with China accounted for 30+% of Myanmar's total trade volume.
Mr. Brimble spelled out the four major challenges to Myanmar's economy in the coming FY 2016-17: thin external and Fiscal buffers; the capacity of the new government to maintain the momentum of the reform process; ethnic and sectarian tensions; and vulnerability to inclement weather and climate conditions like El Nino.
The economy depends on a large scale upon alleviation of poverty, jobs creation and domestic peace and stability, he continued. Moreover, infrastructure needs in electricity supply and energy, telecommunications must be addressed. Private sector development is also a key factor, he concluded.