Myanmar Economic Outlook
The economy appears to have recovered in FY 2023 (October 2022–September 2023) at a faster pace than in the prior fiscal year. Business conditions in the manufacturing sector were roughly stable on average in October 2022–August 2023, after worsening in FY 2022. Furthermore, merchandise exports continued to expand robustly year on year in October-May. On the flipside, foreign direct investment flows into the country plummeted over 60% year on year in April-August. This points to a still-subdued recovery, as activity remains constrained by armed conflict, currency and trade controls, power cuts and Western-led sanctions. In a bid to ease FX shortages, in late August, the junta threatened to take legal action against unauthorized FX possession, while in mid-September, it signed a deal with Russia to pay for petroleum imports in yuan.
Inflation rose to 19.5% in July 2022—the latest month for which data is available (June: 19.4%). Since then, inflation has likely continued to be fueled by money printing and a weak kyat. In July, a new 20,000-kyat (USD 9.50) banknote was issued, potentially stoking price pressures. However, average inflation is expected to ease in calendar year (CY) 2023 compared to CY 2022.