## IMF Staff Praises Myanmar’s Progress in Economic Reform

_IMF News, October 28, 2016_

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**Canonical URL:** [IMF Staff Praises Myanmar’s Progress in Economic Reform](https://www.imf.org/en/news/articles/2016/10/28/pr16469-myanmar-imf-staff-praises-progress-in-economic-reform)

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## Bibliographic details
- Published: October 28, 2016

---

### Mission overview and context
- An International Monetary Fund (IMF) staff team led by Yongzheng Yang visited Myanmar from October 14-28 to undertake the 2016 Article IV Consultation discussions.
- End-of-Mission press releases convey preliminary findings after a visit to a country; the views expressed are those of IMF staff and do not necessarily represent the views of the IMF’s Executive Board.
- The mission had constructive meetings with the Governor of the Central Bank of Myanmar (CBM) U Kyaw Kyaw Maung, Deputy Governors U Set Aung, Daw Khin Saw Oo, and U Soe Min, Deputy Planning and Finance Minister U Maung Maung Win, and other senior officials; the team also met parliamentarians, private sector representatives, and civil society.
- It is expected that the IMF’s Executive Board will consider the 2016 Article IV consultation in January 2017.

### Key macroeconomic findings and projections
- Myanmar remains a fast-growing economy with real GDP increasing by 7.3 percent in FY2015/16 (ending March 31).
- Growth softened in the first half of FY2016/17 due to:
  - a correction in the real estate market,
  - an adjustment in the construction sector,
  - slowing demand from major trading partners,
  - weak commodity prices.
- With expected increases in FDI and aid inflows, growth is expected to recover in the second half of the year and the full-year growth is projected at 6.5 percent.
- Inflation is projected to stay at around 9 percent on average for FY2016/17.
- The external current account deficit is projected to increase to about 6.7 percent of GDP.

### Progress on reforms and institution-building
- Authorities have made important progress since the last Article IV consultation, including:
  - enactment of the Financial Institutions Law,
  - passage of the Investment Law,
  - continued improvements in revenue administration, including the successful introduction of income tax self-assessment at the large taxpayer office.

### Main macroeconomic risks and imbalances
- Persistent macroeconomic imbalances include:
  - high inflation,
  - a significantly increased fiscal deficit,
  - a widening external current account deficit.

### Policy recommendations (IMF staff priorities)
- Safeguard macroeconomic stability by:
  - bringing down inflation,
  - strengthening Myanmar’s external position,
  - fortifying the banking system.
- Fiscal policy:
  - keep the fiscal deficit in check,
  - phase out central bank financing of fiscal deficits (a priority).
- Monetary and exchange rate policy:
  - tighten monetary conditions,
  - allow the exchange rate to move more flexibly in line with market conditions.
- Financial sector and public finance:
  - issue prudential regulations soon,
  - reform state-owned banks to reduce risks to public finance and the financial system,
  - carefully phase liberalization of the financial sector to improve financial inclusion, especially for agriculture and small and medium-sized enterprises.
- Revenue mobilization and public administration:
  - focus on domestic revenue mobilization, including by rationalizing tax exemptions and investment incentives,
  - pass the draft Tax Administration Procedure Law,
  - initiate sustained public education on the importance of taxation for economic and social development.
- Structural reforms:
  - accelerate reforms of state economic enterprises,
  - continue efforts to streamline business regulation to create an enabling environment for the private sector.

*Press Release No. 16/469 — October 28, 2016 (IMF staff statement)*

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## References

- [Myanmar and the IMF](http://www.imf.org/external/country/MMR/index.htm)
- [IMF Policy Advice -- A Factsheet](https://www.imf.org/en/about/factsheets/imf-surveillance)
- [Press Releases](https://www.imf.org/en/news/searchnews)
- [PRESS CENTER](http://presscenter.imf.org/)
- [https://www.imf.org/en/home](https://www.imf.org/en/home)

_Source: https://www.imf.org/en/news/articles/2016/10/28/pr16469-myanmar-imf-staff-praises-progress-in-economic-reform_