Myanmar Country Report 2015

Country Report 2015

(World Ranking 71, World Bank 2015). July 27, 2015 | Publisher: 7 Human Rights Watch, World Report 2015: In FY2016-17, economic growth slowed to 5.9% (after +7.3% in FY2015-16). National reports on human rights practices in 2015.

Burma 2015 Review | Burma 2016

In Myanmar, a major election win by the Opposition at the end of 2015 triggered a new surge of investors' confidence and, after a somewhat unsure year, raised hope for greater financial stabilization in 2016. The November election win for the National League for Democracy (NLD) under Daw Aung San Suu Kyi will lead to greater civil involvement in the administration, although the army will maintain full oversight of the ministries of defence, interior and borders in the new cabinet, along with a minumumum of 25% of parliamentary seat and significant commercial involvement.

In 2015, despite the slowdown in the international economic situation, Myanmar recorded GDP expansion of 8.5%, according to the IMF. It is thus above the five initial ASEAN countries Indonesia, Malaysia, the Philippines, Singapore and Thailand with 4.6 percent and the worldwide mean of 3.1 percent increase.

For 2016, a relatively stable increase in gross domestic product is anticipated, which is forecast by the IMF to weaken somewhat to 8.3 percent. The high level of consumption contributed to the expanding retailing business in Myanmar and at the same time increased the attractiveness of the branch for overseas brand names. In the course of the year, multinational breweries such as Heineken and Carlsberg opened manufacturing plants in the Czech Republic through jointventures with domestic associates, and the Japanese company Kirin in August purchased a 55% share in the Myanmar Beer brand for 560 million dollars.

This year also saw rapid expansion in industrial real estate developments, driven by increasing demands for quality retail properties, particularly in Yangon, the country's finance and banking centre. This should help to maintain activities in Myanmar's building industry, which already has several infrastructural ventures. Nine international bankers had started operating in an important area for the country's finance service industry by early 2016, albeit to a lesser extent.

The new NLD administration, which will be officially swear in in March this year, will, however, come into an industry that faces continuing restructuring problems, with a growing budget gap estimated at 5.5% of GNP according to the IMF. Increasing global warming also had a negative impact on Myanmar's 2015 output after gaining impetus from high cash flow, increasing consumer demands and a shortage of fresh produce following the mid-year floods across the country.

The IMF's latest IV consultations with Myanmar forecast that by the end of fiscal 2015/16 there will be an upward trend in IMF annual inflation to 13.3%, up from 7.4% in fiscal 2014/15. In order to relieve pressures on the Kyoto Protocol and contain global warming, the Central Bank of Myanmar at the end of November announces its intention to boost banks' minimum reserves quota and the value of its bi-weekly deposits auctions, signaling an interest cut as an option.

In order to safeguard nutritional stability and stabilize internal demand for foods, the Chinese authorities ordered a six-week freezing of travel export, one of the main pillars of Myanmar's external economic activity. FDI has also been slowing somewhat, to $4.1 billion in December 2015, according to the Directorate of Investments and Business Administration. Until the end of fiscal 2015/16, investments abroad should amount to $6 billion, after $8 billion in fiscal 2014/15.

So far, the majority of capital expenditure has been attracting more than $2 billion in the petroleum and natural-gas industries in December, while $736 million has been invested in transport and communication and $685 million in production. The inflow of capital is projected to increase again in 2016, with a smoothly running elections and the promise of a change of state in the next few heats.

U Aung Naing Oo, Myanmar Investments Commission Secretariat, expects higher investments in the first six of 2016, particularly from EU states.

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