Myanmar’s growth target for the country’s economy this financial year has been set at 7 per cent according to the National Plan legislation.
This boosts U Kyaw Win’s earlier prediction. The Minister for the Ministry of Planning and Finance has previously said that Myanmar’s economy will take off within the financial year of 2017-18 ‘like a plane from a runway’. Although these remarks came in for criticism from some in the business sector, there seems to be some reasons to be optimistic.
Economic growth central for government
Permanent Secretary of the Ministry of Planning and Finance, U Tun Tun Naing, has said that the government is pushing economic growth with its national plan, which has already been approved.
U Tun Tun Naing further specified that the government, the public and private sectors, will all be working together to make the economy grow as much as possible, during years 2-4 of the NLD (National League for Democracy) led administration.
His argument is that during the first year of government transition, focus had to be on continuity and the final year will be concentrating on the next election. Therefore, it’s the years in between that are critical for the economy.
The GDP growth rate for Myanmar slowed right down to 6.5 per cent during the financial year 2016-2017, compared with 7.3 per cent in the year before. This is partly due to fall of exports and the weakness of commodity prices. This is according to figures from the Ministry of Planning and Finance.
Growth expected over next fiscal year
For the fiscal year 2017-18, the government expects GDP to grow 7 per cent, with the next six to 12 months being critical for their plans. It’s expected that the GDP growth for the industrial sector will be 11.3 per cent, for the agricultural sector 4.6 per cent and for the services sector 7.4 per cent.
As the country’s economy is primarily based on agriculture, this is the area that the government has chosen to prioritise with a programme of reform. Arrangements are underway to offer loans to farmers, via a co-operative venture between Myanmar Economic Bank, Myanmar Agricultural Development Bank and private banks.
They’re also encouraging contract farming, which will help agricultural small and medium businesses to grow. The government is also encouraging investment into agro-based industries and agricultural infrastructure. This fits with the wider economic policy to encourage investment in innovation and technology.
So, it seems that there are reasons to be optimistic about Myanmar’s economic future. Myanmar is going through a massive period of change, not just in government but historically and economically. Businesses and investors need to look long term for real results, and the next 12 months will be crucial for the current government as they strive to make improvements that count.