Myanmar Economy 2015The Myanmar economy in 2015
The Economist Intelligence Unit's latest political analysis and economic growth summary for Myanmar until 2011.
Economic growth in Myanmar expected to be modest in 2015
Overall, the Asia-Pacific segment is set to expand by 6.5 percent in 2015, declining slightly from 6.8 percent in the previous year. "East Asia-Pacific development remains growing solidly, but the facilitating tendency implies that regional leaders must continue to focus on implementing structure reform that forms the basis for sustained, long-term and integrated economic development.
East Asia Pacific Economic Update published today addresses the region's difficult world economic climate. Recoveries in high-income markets continue to be slow, world trading is slowing at a rate not seen since 2009, and the common deceleration in emerging markets has accelerated, especially among raw material manufacturers affected by lower raw material surcharges.
Developments in East Asia are very different. China's economy is projected to expand by around 7% this year and to slowly slow down thereafter as its economy shifts further towards a pattern more strongly driven by internal demand and service, which means a progressive slowdown in economic expansion. In 2015, the remainder of the emerging countries of East Asia are projected to increase by 4.6%, similar to last year.
Raw material exporting countries such as Indonesia, Malaysia and Mongolia will see lower economic output and lower government revenue this year due to lower raw material-pricing. Raw material imports will continue to show a steady - and even strong - rate of increase. In Vietnam, for example, 6.2% in 2015 and 6.3% in 2016 are foreseen.
However, in many smaller nations economic expansion will slow down. Cambodia's lower farm production is damaging the economy, although it will still grow by 6.9% this year. Myanmar is expected to see heavy floods in July reduce its rate of expansion from 8.5 per cent in 2014 to 6.5 per cent. The Pacific island states, on the other hand, will record modest economic expansion.
It predicts a progressive deceleration of the China economy in 2016-17. Should China's economic expansion continue to decelerate, the impact would be felt in the remainder of the area, particularly in those China-related destinations through trading, investing and tourist activities. Meanwhile, Myanmar's economy expanded by 8.5% in real term in 2014/15, but is expected to decline to 6.5% in 2015/16 due to flooding and slowed capital outlays.
Despite the continuing impetus from the economy and socio-political issues, in spite of these changes, consumers and investors have become more confident. This, together with the general appreciation of the US dollar, has put Myanmar's currency against it. The fast pace of loan lending to the non-public sectors has fuelled the pace of financial recovery. Provided that further reform continues, the medium-term outlook for the economy remains good.