Country Economic Forecasts > Burma Myanmar

Despite severe flooding, the economy is still estimated to have grown by about 7% in the fiscal year to March 2016, driven by strong growth in construction, manufacturing and services. Tourist arrivals rose to 4.7 million last year, more than double the number in 2013 and helping to limit the widening of the current account deficit. The trade gap rose, as goods exports only increased slightly, hit by lower prices and demand for gems, gas and minerals. Exports should recover but import needs remain high, particularly for capital and consumer goods. The flooding raised food prices, keeping headline inflation in double digits. Adding to inflation pressures, the kyat depreciated by more than 20% against the US$ during 2015 and although we expect inflation to moderate, monetary policy may need to tighten in the coming years, particularly as the external and fiscal deficits are set to stay large. Burma remains one of Asias poorest countries and the challenge of reforming the economy and consolidating a freer political system is substantial. Furthermore, weaker Chinese growth has dampened regional activity and commodity prices, reducing Burmas gas revenues and making investments in the mining sector less profitable, potentially slowing its expansion. But notwithstanding the risks, Burmas medium-term outlook appears positive.