Myanmar is set to grow 8.3 percent in the fiscal year 2015-16 which ends March 31 next year, a new Asian Development Bank (ADB) economic report predicted.
The government’s ambitious structural reform program has underpinned strong growth in recent years and this is set to continue in 2015, ADB’s annual economic publication, Asian Development Outlook 2015 (ADO), forecast.
“ADB also expects growth to remain over 8 percent in fiscal year 2016, propelled by investments stimulated by the ongoing reforms, an improved business environment, and the country’s integration into Southeast Asia,” said Peter Brimble, deputy country director in Myanmar.
ADB said inflation will likely accelerate to 8.4 percent in FY2015, propelled by higher fiscal spending and expected higher wages, which will increase domestic demand. Consumer price pressures should then ease slightly in FY2016 to 6 percent, it added.
According to the report, risks to Myanmar’s economic outlook come from thin external and fiscal buffers, ethnic and sectarian tensions, extreme weather events, and a possible slowing of reform momentum ahead of elections.
The report noted the country made positive steps forward in 2014 in improving its economic data collection, which is badly needed to support policy formulation and planning.
“While the country has made big strides under its economic reform program, many development challenges remain including improving infrastructure, strengthening governance and public sector capacity, developing human capital, building a dynamic private sector, and revitalizing agriculture,” said ADB Country Director Winfried Wicklein.
The report highlights the low levels of education and hard and soft skills of many young people entering Myanmar’s workforce, leading employers to cite inadequate human resources as a serious barrier to doing business.
“One of the most critical challenges is to develop the country’s youth, better equipping them for roles in a modern economy and society,” said Chris Spohr, ADB Principal Social Sector Specialist in Myanmar.