Myanmar's economic outlook remains favourable, says IMF

The International Monetary Fund (IMF) said Myanmar's economic outlook remains favourable. The IMF projected that Myanmar's real GDP growth will rise to about 7.8 per cent in 2014/2015, up from its current growth rate of 7.3 percent.

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File photo: A general view of one of the main roads in central Yangon, Myanmar. (AFP/File/Christophe Archambault)

YANGON: The International Monetary Fund (IMF) said Myanmar's economic outlook remains favourable.

The IMF projected that Myanmar's real GDP growth will rise to about 7.8 per cent in the 2014-2015 financial year, up from its current growth rate of 7.3 percent.

IMF's Myanmar Mission Chief, Matt Davis, gave this assessment at a news conference in Yangon.

However, he also highlighted several areas of concern.

Inflation is expected to exceed 6 per cent by the end of the 2013-2014 financial year, and it will remain high in the coming year.

This will be due to pressures from factors like rapid money and credit growth, and possible electricity price hikes.

The IMF said Myanmar should therefore reduce deficit monetisation in order to moderate inflation pressures.

Another concern is limited macroeconomic management capacity and narrow cushions.

Mr Davis said: "Providing the new central bank more autonomy, more ability to conduct monetary policy and to build its reserves and on the government budget side, keep the fiscal deficit to a level which provides development to its people and maintains macroeconomic stability. And to make sure that's really successful, what's important is improving tax performance so there's more money to support growth of Myanmar."

The IMF said Myanmar authorities such as the central bank have made good progress in their macroeconomic reforms.

But they must continue to build on this progress.

The IMF believed the financial sector reforms in Myanmar will not only open doors to its trading partners, particularly those within the Southeast Asian region , it will also help Myanmar to take full advantage of the ASEAN Economic Community, to be established by next year.

- CNA/gn

http://www.information.myanmaronlinecentre.com/myanmars-economic-outlook-remains-favourable-says-imf/