Myanmar Economic Forecast

Myanmar Economic Outlook

August 25, 2020

Covid-19 seems to have pushed the economy into a severe downturn in H1. Depressed foreign demand and severe disruptions to global supply chains dealt a heavy blow to the clothing industry, forcing factories to suspend operations and, in turn, prompting job shedding. This, coupled with falling remittances inflows, likely dented household spending in H1, while lingering uncertainty likely boded ill for investment activity. Moreover, travel restrictions hammered the tourism sector. Turning to H2, the manufacturing PMI rebounded in July, pointing to the first expansion in activity since January as both output and new orders gained traction. In politics, tensions remain high in the run-up to the November elections, after officials banned the head of the Rohingya-led opposition party from running for political office and announced that the vote in the war-torn Rakhine state might be postponed.

Myanmar Economic Growth

Growth is expected to slump this year, battered by Covid-19. The external sector is set to be especially hard hit amid eviscerated foreign demand and vanishing tourist inflows. Similarly, investment activity will likely drop on weaker sentiment while falling remittances will weigh on household spending. The weak health system and a shaky banking sector pose downside risks. The FocusEconomics Consensus Forecast panel projects economic growth of 1.7% in FY 2020, which is down 0.1 percentage points from last month, and 6.6% in FY 2021.

Myanmar Economy Data

2015 2016 2017 2018 2019
Population (million)51.852.352.652.853.0
GDP per capita (USD)1,2191,1571,1661,2171,305
GDP (USD bn)63.260.561.464.369.2
Economic Growth (GDP, annual variation in %)7.05.95.86.46.8
Unemployment Rate4.04.04.04.0-  
Fiscal Balance (% of GDP)-2.8-3.9-2.7-3.0-3.5
Public Debt (% of GDP)35.837.838.336.338.2
Inflation Rate (CPI, annual variation in %)9.47.04.66.98.8
Policy Interest Rate (%)10.0010.0010.0010.0010.00
Exchange Rate (vs USD)1,3041,3581,3621,5501,466
Exchange Rate (vs USD, aop)1,1651,2361,3641,4431,522
Current Account (% of GDP)-3.4-4.2-6.5-4.2-2.0
Current Account Balance (USD bn)-2.2-2.5-4.0-4.2-1.4
Trade Balance (USD billion)-3.8-3.6-5.8-4.3-  
Exports (USD billion)10.09.29.811.1-  
Imports (USD billion)13.812.815.615.4-  
Exports (annual variation in %)-0.7-7.36.212.9-  
Imports (annual variation in %)15.7-7.021.6-1.1-  
International Reserves (USD)4.44.64.95.35.5
External Debt (% of GDP)22.623.424.523.2-  

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Myanmar Facts

Value Change Date
Bond Yield16.000.0 %Oct 15
Exchange Rate1,4760.0 %Jan 01

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