In its annual “Asian Development Outlook” report, the ADB highlighted a 59.5pc increase in capital goods imports to US$5.8 billion last year, as well as resurgence for the agriculture sector, after being hit by flooding the year before.
“Business confidence has markedly improved in recent years, as reflected in a rapid increase in new business registrations, which exceeded 5,000 in the 10 months to January 2013, more than in the whole of the previous fiscal year,” the report states, adding that private sector credit maintained a rapid growth at 46pc for the last fiscal year.
In the oil and gas sectors, the ADB also pointed to a 68.8pc increase in natural gas exports to 7.7 trillion cubic feet in the 12 months to September 2013, with the Shwe and Zawtika gas fields starting production.
Last year’s economic growth exceeds prior outlooks by the World Bank and ADB, both of whom revised growth up to 6.8 percent in October.
As a result of high GDP growth last year and the prospect of continued reforms and investment from abroad, growth is expected to increase a further 7.8 percent for the 2014 fiscal year, the ADB stated.
“A number of developments last year contributed to raising Myanmar’s international profile as an investment destination, including the award of telecommunications licenses to Norway’s Telenor and Qatar’s Ooredoo, [and a] selection of investors…as preferred bidders for developing airports,” the report states.
It added that Myanmar will also benefit from relaxing import restrictions and foreign exchange controls.
With economic growth however comes risk, as inflation is expected to continue climbing from an average of 5.8pc last year to 6.6pc in 2014 and 6.9pc in 2015.
“Factors contributing to inflation include a boost to public sector wages, higher electricity tariffs, and rising property prices in cities,” the report said.
With only 28pc of the population currently with access to electricity, the ADB suggests that the electrification of the country could pose a serious threat to growth if it is not addressed.
“Meeting the energy challenge will play a major role in poverty reduction and stimulating regional development. In addition, improved power supply to all ethnic groups will contribute to the peace dividend,” the report states.
source: The Myanmar Times