Myanmar has won praise from the World Bank, with the international financial institution applauding the economy’s “strong” 6.5 percent growth in 2012-2013.
In the first edition of its Myanmar Economic Monitor, released on November 6, the bank says growth was driven mainly by strong performance in gas production, services, construction, foreign direct investment and commodity exports.
The monitor also indicates that the outlook in the short to medium term remains positive though there are risks, on both the domestic and external fronts, says a World Bank news release.
A risk factor clouding the domestic outlook was the challenge of maintaining reforms. External risks included the possibility of a slowdown in Chinese domestic investment and a decline in global commodity prices, which would hurt countries such as Myanmar.
The monitor says the economy is projected to grow at 6.8 percent in 2013/14 and to rise to 6.9 percent in the medium term, because of a continued rise in gas production, increased trade and stronger performance in agriculture.
It also reports that inflation has been rising in recent months, reaching 7.3 percent in August, because of increases in the cost of food and housing rentals.
A factor contributing to rising food costs was higher rice prices due to an increase in exports which had led to a decline in the amount available on the domestic market.
“Rising inflation is always a cause for concern since it hurts the poor disproportionately, but economies do sometimes experience rising inflation, especially when in transition as is the case in Myanmar,” May Thet Zin, the bank’s country economist for Myanmar, is quoted as saying in the news release.
May Thet Zin said that while there was no cause yet for alarm because inflation remained in single digits “it will be important for the authorities to keep a close eye on the situation so that it does not get out of hand.”
The monitor, which will be published every six months, also notes that in recent months the nominal and real effective exchange rates have been depreciating, which helps to make exports more competitive.
“However, these indicators appear to have started appreciating in August, which could erode Myanmar’s export competitiveness,” the news release says.
The World Bank’s senior country economist on Myanmar, KhwimaNthara, said it hoped the monitor would contribute towards providing data on economic and policy developments “as well as outlook going forward that various groups will find useful.”
source: Mizzima
http://www.mizzima.com/business/economy/item/10520-world-bank-report-praises-strong-economic-growth
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