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Economy Growth Raises up Despite Some Risks

Myanmar economy was getting better in the 2017-2018 fiscal year with a recovery in agriculture, improved manufacturing sector and service sector growth in spite of the tourism and banking sector risks according to Myanmar Economic Monitor report of the World Bank released on May 17, 2018. Real GDP growth increased to 6.4 percent in 2017-2018 financial year, from 5.9 percent in 2016-2017 financial year and is expected to increase to 6.8 percent in 2018-2019. Inflation reduced to 5.5 percent in 2017-2018, from 7 percent in 2016- 2017 and is expected to reduce further to 4.9 percent, the World Bank’s report said.

Rice exports are at record high, garments exports are entering new markets, while gas exports are being boosted by a significant increase in global gas prices, the report said. On the other hand, there are concerns on the slow pace of government reforms, susceptibility in the financial sector, limited success in solving humanitarian crisis in Rakhine, all of which effecting negatively on business sentiment and causes reputational risks of investing in Myanmar by new and existing foreign direct investors. FDI approvals were down by 14 percent in comparison with 2016- 2017.

“For the economy to sustain its positive momentum amid intensifying risks, it needs well targeted public investments and private sector activity encouraged by a stable macroeconomic environment and policy certainty. Providing and pricing electricity well, implementing the company act, servicing tax payers, and securing the environment for financial transactions, can help in this regard” said Hans Anand Beck, lead economist of World Bank for Myanmar.