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IHS Economic Report: Myanmar, Fast & Furious, Excerpts
IHS Economic Report: Myanmar, Fast & Furious, Excerpts
IHS Economic Report: Myanmar, Fast & Furious, Excerpts
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IHS Economic Report: Myanmar, Fast & Furious, Excerpts

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  • 1. IHS Research Note: IHS Global Insight Asia-Pacific Chief Economist Rajiv Biswas’ Asia Letter – Myanmar economy: Fast & Furious, an assessment of the rapid pace of economic reform in Myanmar and the medium-term growth outlook, is attached. A brief summary of Rajiv’s analysis is presented below: ___________________________________________________________________ Asia Letter – Myanmar Economy: Fast & Furious November 2013 Myanmar’s pace of economic reform since the historic parliamentary by-elections held in April 2012 has been fast and furious even by the standards of Asian tiger economies Rajiv Biswas Asia Pacific Chief Economist IHS Global Insight Rajiv.Biswas@ihs.com As a result of recent economic reforms and the upsurge in investor interest in Myanmar, the country’s GDP growth momentum has accelerated. However, the rapid pace of economic growth could trigger economic imbalances, notably
  • 2. risks of high inflation and rising asset prices with a key risk being from a potential property bubble developing in Yangon due to surging land and property prices. Key Findings:  Growth: IHS forecasts that Myanmar GDP growth will strengthen to 6.9 per cent in 2013 and 7.0 per cent in 2014. Sustained strong economic growth is also forecast for Myanmar in IHS medium-term economic projections, with average GDP growth of 7.1 per cent per year forecast over 2014-16.  Oil & Gas Revenues: Oil and gas export revenues are being boosted by the Shwe and Zawtika gas projects, with new oil and gas pipelines to southern China completed during 2013. Myanmar’s gas exports are forecast to rise from USD 3.3billion in fiscal 2011-12 to USD 4.3 billion by fiscal 201314, reaching around 36 per cent of Myanmar’s total exports.  Tourism Gold Rush: In the tourism sector, foreign tourism arrivals rose by 32.5 per cent in 2012, with further growth of around 26 per cent year-on-year in the first half of 2013. Large-scale new investment in tourism infrastructure is committed or planned, including a major new international airport in Yangon and dozens of new hotels. The new Myanmar Government Tourism Masterplan aims to lift annual international tourism visits to 7.5 million by 2020, driving rapid growth in tourism-related exports and tourismrelated jobs.
  • 3. Key Risks:  Key risks remain, notably the political risks related to the planned general elections in 2015 as well as from the sectarian violence between Buddhists and Muslims that has erupted in some parts of the nation.  Institutional capacity building is needed to address weak governance standards, with the support of aid and technical assistance by other governments and multilateral institutions such as the IMF, World Bank and ADB. Other ASEAN governments are already playing a key role in such initiatives.  Macroeconomic risks include vulnerability to accelerating inflationary pressures due to rising wage and other input costs. A particular concern relates to rapidly escalating real estate prices as well as rents for commercial and residential property in Yangon, which has become a major hurdle for foreign firms’ expansion plans, and could eventually create risks of a property bubble bursting.  Major bottlenecks to economic development are the lack of essential infrastructure, such as power, ports, roads and railways, as well as the poor education system and vocational training infrastructure. Rajiv Biswas Asia-Pacific Chief Economist IHS Global Insight 7 November 2013

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