Myanmar was ruled by a military dictatorship for much of the last 50 years, resulting in decades of isolation. This weighed heavily on investment and incomes. Positive steps toward democracy has warmed relations with the international community, which have welcomed Myanmar back into the fold with high level visits from the EU and US over the last few years. But actions by the military against the Rohingya minority has been a negative for Myanmar’s international relations.
Weak agricultural production, softer tourism arrivals, lower government spending to improve the public balance sheet, weaker credit growth in response to new banking regulations and the suspension of some construction projects in Yangon, Myanmar’s largest city, has weighed on growth.
An improvement in agricultural production and tourism, robust foreign direct investment and public investment in much needed infrastructure will support the outlook over the coming years as growth is forecast to average 7.5% over the next five years.
Adding further upside to the outlook is greater ASEAN integration, which will give Myanmar greater access to some 600m consumers. But the economy remains in transition and will struggle to compete with its more developed neighbours. Like Cambodia and Laos, Myanmar has been given until 2018 to better equip itself for integration into ASEAN.