International Offices

Myanmar’s economy Info

Myanmar Economic Monitor July 2022:

• Myanmar’s economy has faced a series of external and internal disruptions which have impeded recovery from the large contraction in economic activity last year.
• Economic growth is projected to be 3 percent in the fiscal year ending in September 2022, following an 18% contraction last year, with firm downside risks.
• The absence of a substantial rebound in growth – with GDP in 2022 estimated to still be around 13 percent lower than in 2019 – means that livelihoods and coping mechanisms will continue to be severely strained.
• Poverty is estimated to have doubled compared to March 2020, and with about 40 percent of the population living below the national poverty line in 2022, nearly a decade of progress on poverty reduction has been undone.
• The limited growth will continue to test the resilience of the Myanmar people, with household incomes declining and coping mechanisms against food insecurity and poverty increasingly under strain amidst ongoing internal conflict.
• Weak economic activity is indicative of the range of constraints facing the Myanmar economy. These include a sharp rise in the prices of imported inputs and consumer goods, partly attributable to the war in Ukraine; elevated levels of domestic conflict; electricity outages; and persistent logistics and financial sector disruptions.
• Recent policy shifts have added to challenges for businesses. Burdensome trade license requirements, the abandonment of the managed float exchange rate regime, and the imposition of foreign currency surrender rules have resulted in shortages of key imported inputs and inhibited exporters. Uncertainty among businesses has increased due to the rapid issuance of new policy instructions, including exemptions to previously imposed restrictions, followed by subsequent attempts to revoke those exemptions.
• While the overall economy has faced headwinds, some sectors have stabilized or recovered over the past twelve months, driving the modest growth expected for this year.
• Some firms have reported operating at a higher proportion of their capacity in 2022 than was the case in 2021, particularly in the manufacturing sector, and manufactured exports are recovering.
• Construction activity has also picked up as work on several projects has resumed after a long pause last year, and the pipeline of issued permits has grown.
• A rise in mobility at workplaces, retail outlets, and transport hubs has supported overall activity, although indicators of consumer spending are weak.
• However, industries more dependent on domestic demand are facing challenges from lower household incomes and rising prices, while agricultural production remains constrained by increased input prices, transport disruptions, and ongoing conflict.
• Economic Indicators (%)
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  GDP Growth Rate 2019-2020 FY	3.20%
  Annual Rate of Inflation (February 2021)	2.61%
  Year on Year Inflation (February 2021)	1.51%

• Source: Ministry of Planning and Finance
• Interest Rate (%)
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  Central Bank Rate	7%pa
  Minimum Bank Deposit Rate	5%pa
  Maximum Bank Lending Rate (Secured)	10%pa
  Maximum Bank Lending Rate (Unsecured)	14.5%pa