{
  "title": "Press Release: IMF Executive Board Concludes 2013 Article IV Consultation with Myanmar",
  "publication": "IMF News, August 2, 2013",
  "sourceUrl": "https://www.imf.org/en/news/articles/2015/09/14/01/49/pr13287",
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  "summary": "Growth is estimated to have risen to 6½ percent in fiscal year 2012/13 (April-May), driven by gas production, construction and services.",
  "publishDate": "2013-08-02",
  "sections": [
    {
      "heading": "Recent economic developments",
      "content": "- Growth is estimated to have risen to 6½ percent in fiscal year 2012/13 (April-May), driven by gas production, construction and services.\n- Inflation climbed to 4.7 percent in March 2013.\n- The external current account deficit is estimated to have widened to around 4½ percent of GDP in 2012/13, largely financed by foreign direct investment.\n- Recent depreciation of the kyat is contributing to aligning the exchange rate with longer-term fundamentals after some apparent overvaluation during 2012.\n- The auction-determined reference exchange rate (used by the central bank) and the informal rate have converged.\n- International reserves increased to US$4.6 billion at end-March, covering 3¾ months of prospective imports.\n- Broad money and private sector credit are growing rapidly.\n- The fiscal deficit in 2012/13 is estimated to have declined to 3¾ percent of GDP, on account of higher tax revenues."
    },
    {
      "heading": "Policy reforms and IMF-supported program",
      "content": "- The government has pursued wide-ranging economic reforms, including under their Staff-Monitored Program with the IMF, which is on track.\n- Central elements of the policy program:\n  - Adoption of a managed floating exchange regime.\n  - Establishment of a functioning formal foreign exchange market.\n  - Liberalization of imports and removal of exchange restrictions.\n  - Steps to liberalize bank lending.\n- Budget allocations for health and education increased substantially in 2012/13.\n- Reforms underway to tax policy and tax administration.\n- Legislation passed to improve the business climate and boost investment."
    },
    {
      "heading": "Economic outlook and risks",
      "content": "- Short-term outlook:\n  - Growth is expected to accelerate slightly in 2013/14, led by rising gas production and investment (including in transport and telecommunications), and a recovery in agriculture.\n  - Pressures from wage increases and asset prices are building, but inflation is expected to remain contained at around 6½ percent (year-on-year), assisted by global commodity prices which are forecast to decline.\n  - International reserves are projected to continue to rise.\n  - Financial intermediation is forecast to increase further, with broad money and credit to the economy continuing to expand at double-digit rates.\n  - Following a mid-year supplementary allocation, the budget deficit is projected at around 5 percent of GDP.\n- Medium-term outlook:\n  - Sustained and inclusive growth of around 7 percent is achievable, provided institutions and policies to manage the economy and supervise the financial system continue to be built.\n  - Policies supportive of private sector investment, and public spending on infrastructure, health, and education are required.\n- Key risk:\n  - Limited macroeconomic management capacity, strained by the rapid, broad-based economic transition and emerging domestic price pressures."
    },
    {
      "heading": "Executive Board assessment and policy recommendations",
      "content": "- Commendations:\n  - Directors commended impressive progress in liberalizing the economy and advancement toward medium-term macroeconomic stability and institutional development.\n- Overarching guidance:\n  - Proceed with needed reforms in a carefully sequenced manner and at a pace consistent with administrative capabilities.\n- Fiscal policy:\n  - Fiscal policy appropriately balances macroeconomic stability with development objectives.\n  - Support for reorienting expenditures toward health, education, and infrastructure, taking account of implementation and absorptive capacity.\n  - Need to maintain debt sustainability following recent rescheduling of external arrears.\n  - Encourage reducing monetization of the fiscal deficit further.\n  - Develop a medium-term fiscal framework aimed at smoothing expenditure and building fiscal buffers, requiring improved public financial management and a well-administered broad-based tax system to mobilize non-resource revenues.\n- Exchange rate and reserves:\n  - Welcome liberalization of the foreign exchange system and adoption of a managed float, which facilitated convergence of formal and informal exchange rates.\n  - Recent depreciation of the kyat has helped align the exchange rate with longer-term fundamentals.\n  - Encourage further build-up of the central bank’s international reserves to more comfortable levels.\n  - Look forward to full liberalization of current account transactions envisaged for this year.\n- Monetary policy and central bank:\n  - Urgency of improving monetary policy tools.\n  - Key priorities: enactment of a new central bank law to establish an autonomous and credible monetary authority; development of instruments for effective monetary operations.\n  - Welcome resumption of regular deposit auctions and removal of financing constraints on open market operations.\n- Financial sector development:\n  - Encourage sustained efforts to develop a modern financial sector to support growth and the transmission of monetary policy.\n  - Emphasize strengthening supervision (including of foreign exchange operations and state banks), enhancing prudential regulations and regulatory capacity, and improving licensing procedures for banks.\n  - Urge authorities to address remaining deficiencies in the regime against money laundering and the financing of terrorism.\n- Technical assistance and capacity building:\n  - Recognize the importance of intensive technical assistance that is demand-led and tailored to Myanmar’s specific needs.\n  - Prioritization and close coordination with development partners are needed given the breadth of the reform agenda and limited implementation capacity.\n  - Particular priority should be given to improving economic statistics."
    },
    {
      "heading": "Selected economic indicators and key statistics",
      "content": "- GDP (2012/13): US$55.3 billion\n- Population (2010/11): 61.2 million\n- Quota: SDR 258.4 million\n\n- Output and prices (Percent change)\n  - Real GDP (authorities): 2009/10: 10.6; 2010/11: 10.4; 2011/12: 5.9; 2012/13: 6.7; 2013/14: …\n  - Real GDP (staff working estimates): 2009/10: 5.1; 2010/11: 5.3; 2011/12: 6.4; 2012/13: 6.8\n  - CPI (end-period): 2009/10: 7.7; 2010/11: 8.9; 2011/12: -1.1; 2012/13: 4.7; 2013/14: 6.5\n  - CPI (period average): 2009/10: 2.2; 2010/11: 8.2; 2011/12: 2.8; 2012/13: 5.6\n\n- Consolidated Public Sector (Percent of GDP)\n  - Total revenue: 2009/10: 10.7; 2010/11: 11.4; 2011/12: 12.0; 2012/13: 23.0; 2013/14: 23.4\n  - Union government: 2009/10: 5.8; 2010/11: 6.3; 2011/12: 9.1; 2012/13: 9.0\n  - o/w: Transfers from SEEs to Union government: 2009/10: 2.3; 2010/11: 2.0; 2011/12: 1.9; 2012/13: 1.8\n  - SEE receipt: 2009/10: 7.2; 2010/11: 7.0; 2011/12: 7.8; 2012/13: 15.8; 2013/14: 16.0\n  - Total expenditure: 2009/10: 15.6; 2010/11: 16.9; 2011/12: 16.6; 2012/13: 26.6; 2013/14: 28.4\n  - Expense: 2009/10: 8.7; 2010/11: 8.8; 2011/12: 9.8; 2012/13: 16.7; 2013/14: 19.6\n  - Net lending (+)/borrowing (-): 2009/10: -4.9; 2010/11: -5.4; 2011/12: -4.6; 2012/13: -3.7; 2013/14: -5.0\n  - Domestic public debt: 2009/10: 18.7; 2010/11: 21.0; 2011/12: 22.5; 2012/13: 22.6; 2013/14: 22.4\n\n- Money and Credit\n  - Broad money: 2009/10: 34.8; 2010/11: 36.3; 2011/12: 26.3; 2012/13: 69.9; 2013/14: 26.2\n  - Domestic credit: 2009/10: 34.4; 2010/11: 25.1; 2011/12: 6.2; 2012/13: 29.2\n  - Private sector: 2009/10: 36.9; 2010/11: 65.4; 2011/12: 60.1; 2012/13: 49.9; 2013/14: 36.8\n\n- Balance of Payments (Percent of GDP, unless otherwise indicated)\n  - Current account balance: 2009/10: -1.3; 2010/11: -1.9; 2011/12: -2.4; 2012/13: -4.4; 2013/14: -4.3\n  - Trade balance: 2009/10: 1.3; 2010/11: 0.9; 2011/12: -0.7; 2012/13: -3.9; 2013/14: -3.0\n  - Exports: 2009/10: 19.9; 2010/11: 17.4; 2011/12: 17.9; 2012/13: 18.6\n  - Imports: 2009/10: -18.6; 2010/11: -16.5; 2011/12: -22.5; 2012/13: -22.8\n  - Financial account: 2009/10: 4.0; 2010/11: 3.6; 2011/12: 5.7\n  - Foreign direct investment, net: 2009/10: 2.5; 2010/11: 4.5; 2011/12: 3.7; 2012/13: 5.2\n  - Overall balance: 2009/10: 0.8; 2010/11: -1.0; 2011/12: 1.6\n\n- Gross official reserves\n  - In millions of U.S. dollars: 2009/10: 2,809; 2010/11: 3,754; 2011/12: 4,026; 2012/13: 4,599; 2013/14: 5,537\n  - In months of total imports: 2009/10: 3.9; 2010/11: 3.5\n\n- External debt\n  - Total external debt (billions of U.S. dollars): 2009/10: 13.8; 2010/11: 14.4; 2011/12: 15.3; 2012/13: 13.7; 2013/14: 11.7\n  - (In percent of GDP): 2009/10: 36.1; 2010/11: 29.0; 2011/12: 27.3; 2012/13: 24.8; 2013/14: 19.7\n  - of which: External debt arrears (billions of U.S. dollars) 3/: 2009/10: 9.3; 2010/11: 9.9; 2011/12: 10.8; 2012/13: 4.8\n\n- Terms of trade (in percent change): 2009/10: -2.9; 2010/11: -2.7; 2011/12: -0.1; 2012/13: 0.3\n\n- Exchange rates (kyat/$, end of period)\n  - Official exchange rate: 2009/10: 5.4; 2010/11: 880\n  - Parallel rate: 2009/10: 1004; 2010/11: 861; 2011/12: 822; 2012/13: 878\n\n- Memorandum items\n  - GDP (billions of kyats) 4/: 2009/10: 34,958; 2010/11: 39,847; 2011/12: 43,368; 2012/13: 47,433; 2013/14: 53,501\n  - GDP (billions of US$): 2009/10: 38.1; 2010/11: 49.6; 2011/12: 56.2; 2012/13: 55.3; 2013/14: 59.4\n  - GDP per capita (US$): 2009/10: 587; 2010/11: 742; 2011/12: 900; 2012/13: 868; 2013/14: 915\n\nSource: Press Release No. 13/287, August 2, 2013, IMF Communications Department.\n\n---\n\n Content in this bundle\n\n- Cr13250pdf (PDF){rel=\"external\" type=\"application/pdf\"}\n- Cr13250pdf (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\n References\n\n- Myanmar and the IMF\n- Press Releases\n- PRESS CENTER\n- http://www.imf.org/external/np/sec/misc/qualifiers.htm\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2015/09/14/01/49/pr13287"
    }
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    "Published: August 2, 2013",
    "Growth is estimated to have risen to 6½ percent in fiscal year 2012/13 (April-May), driven by gas production, construction and services.",
    "Inflation climbed to 4.7 percent in March 2013.",
    "The external current account deficit is estimated to have widened to around 4½ percent of GDP in 2012/13, largely financed by foreign direct investment.",
    "Recent depreciation of the kyat is contributing to aligning the exchange rate with longer-term fundamentals after some apparent overvaluation during 2012.",
    "The auction-determined reference exchange rate (used by the central bank) and the informal rate have converged.",
    "International reserves increased to US$4.6 billion at end-March, covering 3¾ months of prospective imports.",
    "Broad money and private sector credit are growing rapidly.",
    "The fiscal deficit in 2012/13 is estimated to have declined to 3¾ percent of GDP, on account of higher tax revenues.",
    "The government has pursued wide-ranging economic reforms, including under their Staff-Monitored Program with the IMF, which is on track.",
    "Central elements of the policy program:",
    "Budget allocations for health and education increased substantially in 2012/13.",
    "Reforms underway to tax policy and tax administration.",
    "Legislation passed to improve the business climate and boost investment.",
    "Short-term outlook:",
    "Medium-term outlook:",
    "Key risk:",
    "Commendations:",
    "Overarching guidance:",
    "Fiscal policy:",
    "Exchange rate and reserves:",
    "Monetary policy and central bank:",
    "Financial sector development:",
    "Technical assistance and capacity building:",
    "GDP (2012/13): US$55.3 billion",
    "Population (2010/11): 61.2 million",
    "Quota: SDR 258.4 million",
    "Output and prices (Percent change)",
    "Consolidated Public Sector (Percent of GDP)",
    "Money and Credit",
    "Balance of Payments (Percent of GDP, unless otherwise indicated)",
    "Gross official reserves",
    "External debt",
    "Terms of trade (in percent change): 2009/10: -2.9; 2010/11: -2.7; 2011/12: -0.1; 2012/13: 0.3",
    "Exchange rates (kyat/$, end of period)",
    "Memorandum items",
    "[Cr13250pdf (PDF)](/-/media/websites/imf/imported/external/np/sec/pr/2013/_cr13250pdf.pdf){rel=\"external\" type=\"application/pdf\"}",
    "[Cr13250pdf (PDF)](/-/media/websites/imf/imported/external/pubs/ft/scr/2013/_cr13250pdf.pdf){rel=\"external\" type=\"application/pdf\"}",
    "[Myanmar and the IMF](http://www.imf.org/external/country/MMR/index.htm)",
    "[Press Releases](https://www.imf.org/en/news/searchnews)",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[http://www.imf.org/external/np/sec/misc/qualifiers.htm](https://www.imf.org/external/np/sec/misc/qualifiers.htm)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
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