Myanmar’s economy facing slowdown: World Bank

Myanmar’s economic growth in fiscal year 2015/16 will be tempered by the impact of this year’s devastating floods and “slowing investment” due to November’s elections, a World Bank report said.

The bank’s latest East Asia Pacific Economic Update, released on October 5, projects that real growth will slow to 6.5 percent, down from an estimated 8.5 percent in fiscal year 2014/15. The bank projects inflation to increase to 11.3 percent in the current fiscal year, up from 10 percent last year, due to supply-side pressure stemming from the floods and currency depreciation.

While the report claimed that “medium-term growth prospects remain strong,” the bank warned that sustained high growth will be contingent on continued economic reform, which “will hit a hiatus over the election period.”

A number of laws intended to improve Myanmar’s investment climate – including proposed legislation that would harmonise investment laws for Myanmar nationals and foreigners – are unlikely to be passed before the election. In 2014, the World Bank ranked Myanmar 177th out of 189 countries in its “Ease of Doing Business” index, underscoring the need for further fiscal reform to boost investor confidence.

The bank predicted a slowdown in East Asia’s developing economies over the next few years, with regional growth expected to drop to 6.5 percent this year. The World Bank forecast that Myanmar’s growth would slow to 6.3 percent in fiscal year 2016-17, due largely to decelerating economic performance in China, exacerbated by the United States’ move to recalibrate monetary policy.

Despite this year’s forecasted growth slowdown, Myanmar’s economic growth will outstrip that of its Southeast Asian neighbours, the report said.

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