{
  "title": "IMF Staff Completes 2019 Article IV Visit to Myanmar",
  "publication": "IMF News, December 20, 2019",
  "sourceUrl": "https://www.imf.org/en/news/articles/2019/12/20/pr19480-imf-staff-completes-2019-article-iv-visit-to-myanmar",
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  "summary": "Mission led by Mr. Shanaka J. Peiris visited Myanmar from December 4 to 19, 2019 to conduct discussions for the 2019 Article IV consultations.",
  "publishDate": "2019-12-20",
  "sections": [
    {
      "heading": "Mission summary and headline findings",
      "content": "- Mission led by Mr. Shanaka J. Peiris visited Myanmar from December 4 to 19, 2019 to conduct discussions for the 2019 Article IV consultations.\n- Views expressed are those of IMF staff and do not necessarily represent the views of the IMF’s Executive Board.\n- Recent performance:\n  - Growth is estimated at 6.5 percent in 2018/19, up slightly from 6.4 percent in 2017/18.\n  - Fiscal deficit widened slightly to 3.5 percent of GDP in 2018/19, compared to 3.0 percent in 2017/18.\n  - Current account deficit halved in 2018/19 to 2.0 percent of GDP.\n  - Headline inflation stood at 8.6 percent as of end-September 2019 largely due to one-off factors (higher electricity tariffs, food, and fuel prices)."
    },
    {
      "heading": "Medium-term outlook and risks",
      "content": "- Medium-term growth is likely to remain below potential despite favorable long-term dynamics (positive population dynamics and Myanmar’s strategic location).\n- For 2019/20, growth is expected to be broadly stable with higher government spending largely offset by pre-election uncertainty and weaker private demand.\n- Inflation is expected to fall to 6-7 percent in the medium term as one-off impacts subside.\n- Downside risks:\n  - Domestic: insufficient fiscal acceleration could depress growth; delayed restructuring and recapitalization of the banking system could increase systemic risks with large macro-financial spillovers; deterioration of the security situation and continued humanitarian issues in Rakhine could weigh on sentiment.\n  - External: rising trade tensions and global market volatility, higher crude oil prices, and spillovers from a slowdown in China."
    },
    {
      "heading": "Policy recommendations",
      "content": "- Fiscal policy:\n  - Aim to raise tax revenues that remain very low by international standards and boost SDG-related spending.\n  - A modestly higher fiscal deficit would still maintain debt sustainability but should be fully financed through issuance of market-based securities and concessional external loans, while central bank financing is gradually phased out.\n  - Institute a public private partnership (PPP) framework to improve project selection and ensure value-for-money through competitive bidding, building on the project bank regulation.\n  - Strengthen profitability and governance of state economic enterprises (macro-critical).\n  - New petroleum production sharing contracts should rely on a revised model contract to help maximize revenues and ensure transparency.\n  - Expedite finalization of new power purchase agreements through enhanced inter-ministerial coordination with due regard to cost competitiveness and fiscal risks.\n- Monetary and exchange rate policy:\n  - Continue exchange rate flexibility to cushion external shocks.\n  - Active control of monetary conditions and fading one-off supply-side pressures should reduce inflation.\n  - Upgrade monetary and FX operational framework, including allowing greater interest rate flexibility, to anchor inflationary expectations and strengthen the monetary transmission mechanism.\n  - Continue work to ensure full compliance with international standards on anti-money laundering and combating the financing of terrorism ahead of upcoming Asia-Pacific Group reviews in 2020.\n- Financial sector and banking:\n  - Ensure the banking sector is sufficiently capitalized, regulated, and supervised to support lending to productive sectors.\n  - Bank restructuring should follow new prudential regulations and be part of a comprehensive financial sector reform strategy to minimize eventual clean-up costs and risks of negative spillovers.\n- Structural and development policy:\n  - Continue reforms to improve governance and reduce the cost of doing business to attract private investment.\n  - Consistent implementation of structural reforms and scaling up needed infrastructure plus faster resolution of security and humanitarian issues would support higher external financing and more sustainable development.\n  - Full implementation of the Myanmar Sustainable Development Plan (MSDP) and targeted scaling up of infrastructure and human capital spending can help achieve the SDGs and boost sustainable growth.\n  - Continued capacity development to support reform implementation and institution building is critical to achieving the goals set in the MSDP."
    },
    {
      "heading": "Financial and reform measures welcomed",
      "content": "- Recent reforms noted by staff:\n  - Increase in electricity tariffs.\n  - Liberalization of the financial sector including opening to foreign insurance companies and banks.\n  - Move to greater exchange rate flexibility.\n- Staff encouraged continuation and deepening of these reforms."
    },
    {
      "heading": "Mission engagement",
      "content": "- Staff team met with:\n  - Governor and Deputy Governors of the Central Bank of Myanmar.\n  - Union Minister and Deputy Ministers of Ministry of Planning, Finance and Industry.\n  - Senior government officials, members of parliament, private sector business and financial representatives, and development partners.\n- IMF Communications contact: PRESS OFFICER: Keiko Utsunomiya; Phone: +1 202 623-7100; Email: MEDIA@IMF.org"
    },
    {
      "heading": "Selected economic indicators (2015/16–2021/22) — key figures preserved exactly as presented",
      "content": "- Real GDP (annual growth rates):\n  - 2015/16: 6.4\n  - 2016/17: 5.8\n  - 2017/18: 6.5\n  - 2018/19: 6.0\n  - 2019/20: 6.2\n  - 2020/21: (not shown)\n  - 2021/22: (not shown)\n- CPI (end-period; base year from 2014/15=2012):\n  - 2015/16: 3.9\n  - 2016/17: 3.4\n  - 2017/18: 8.6\n  - 2018/19: 9.5\n  - 2019/20: 7.7\n  - 2020/21: 6.6\n- Consolidated public sector (percent of GDP) — Total revenue:\n  - 2015/16: 19.6\n  - 2016/17: 18.3\n  - 2017/18: 18.8\n  - 2018/19: 18.0\n  - 2019/20: 18.1\n  - 2020/21: 18.4\n- Consolidated public sector — Tax revenue:\n  - 2015/16: 7.1\n  - 2016/17: 6.8\n  - 2017/18: 7.2\n  - 2018/19: 7.5\n- Consolidated public sector — Total expenditure:\n  - 2015/16: 23.4\n  - 2016/17: 21.0\n  - 2017/18: 21.8\n  - 2018/19: 21.5\n  - 2019/20: 22.2\n  - 2020/21: 22.5\n  - 2021/22: 22.8\n- Net lending (+)/borrowing (-):\n  - 2015/16: -3.9\n  - 2016/17: -2.7\n  - 2017/18: -3.0\n  - 2018/19: -3.5\n  - 2019/20: -4.1\n  - 2020/21: -4.4\n- Domestic public debt:\n  - 2015/16: 22.0\n  - 2016/17: 23.3\n  - 2017/18: 26.3\n  - 2018/19: 23.0\n  - 2019/20: 23.5\n  - 2020/21: 24.0\n- Money and credit (percent change) — Broad money:\n  - 2015/16: 16.5\n  - 2016/17: 21.4\n  - 2017/18: 18.6\n  - 2018/19: 15.4\n  - 2019/20: 12.6\n  - 2020/21: 10.5\n  - 2021/22: 10.8\n- Domestic credit:\n  - 2015/16: 30.1\n  - 2016/17: 22.3\n  - 2017/18: 14.5\n  - 2018/19: 11.1\n  - 2019/20: 11.7\n- Private sector credit:\n  - 2015/16: 33.9\n  - 2016/17: 27.4\n  - 2017/18: 21.2\n  - 2018/19: 16.4\n  - 2019/20: 12.9\n- Balance of payments — Current account balance:\n  - 2015/16: -4.2\n  - 2016/17: -6.5\n  - 2017/18: -2.0\n  - 2018/19: -3.4\n  - 2019/20: -3.7\n- CBM reserves (gross) (In millions of U.S. dollars):\n  - 2015/16: 4,835\n  - 2016/17: 5,141\n  - 2017/18: 5,462\n  - 2018/19: 5,667\n  - 2019/20: 5,830\n  - 2020/21: 6,091\n  - 2021/22: 6,549\n- Total external debt (billions of U.S. dollars):\n  - 2015/16: 12.7\n  - 2016/17: 12.3\n  - 2017/18: 18.9\n- Total external debt (percent of GDP):\n  - 2015/16: 20.0\n  - 2016/17: 29.8\n  - 2017/18: 24.1\n  - 2018/19: 22.4\n  - 2019/20: 21.1\n- Exchange rates (kyat/$, end of period) — Official exchange rate:\n  - 2015/16: 1,226.1\n  - 2016/17: 1,357.7\n  - 2017/18: 1,551.5\n  - 2018/19: 1,533.0\n- Memorandum items — GDP (billions of kyats):\n  - 2015/16: 74,216\n  - 2016/17: 82,700\n  - 2017/18: 92,789\n  - 2018/19: 105,012\n  - 2019/20: 120,872\n  - 2020/21: 138,076\n  - 2021/22: 157,026\n- Memorandum items — GDP (billions of US$):\n  - 2015/16: 60.4\n  - 2016/17: 61.5\n  - 2017/18: 67.1\n  - 2018/19: 68.5\n  - 2019/20: 74.8\n  - 2020/21: 81.8\n  - 2021/22: 89.5\n- Memorandum items — GDP per capita (US$):\n  - 2015/16: 1,210\n  - 2016/17: 1,267\n  - 2017/18: 1,279\n  - 2018/19: 1,242\n  - 2019/20: 1,321\n  - 2020/21: 1,440\n  - 2021/22: 1,593\n\nSource: IMF staff statement concluding the 2019 Article IV visit to Myanmar (December 20, 2019).\n\n---\n\n\n References\n\n- Myanmar and the IMF\n- IMF Policy Advice -- A Factsheet\n- Press Releases\n- PRESS CENTER\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2019/12/20/pr19480-imf-staff-completes-2019-article-iv-visit-to-myanmar"
    }
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    "Published: December 20, 2019",
    "Mission led by Mr. Shanaka J. Peiris visited Myanmar from December 4 to 19, 2019 to conduct discussions for the 2019 Article IV consultations.",
    "Views expressed are those of IMF staff and do not necessarily represent the views of the IMF’s Executive Board.",
    "Recent performance:",
    "Medium-term growth is likely to remain below potential despite favorable long-term dynamics (positive population dynamics and Myanmar’s strategic location).",
    "For 2019/20, growth is expected to be broadly stable with higher government spending largely offset by pre-election uncertainty and weaker private demand.",
    "Inflation is expected to fall to 6-7 percent in the medium term as one-off impacts subside.",
    "Downside risks:",
    "Fiscal policy:",
    "Monetary and exchange rate policy:",
    "Financial sector and banking:",
    "Structural and development policy:",
    "Recent reforms noted by staff:",
    "Staff encouraged continuation and deepening of these reforms.",
    "Staff team met with:",
    "IMF Communications contact: PRESS OFFICER: Keiko Utsunomiya; Phone: +1 202 623-7100; Email: MEDIA@IMF.org",
    "Real GDP (annual growth rates):",
    "CPI (end-period; base year from 2014/15=2012):",
    "Consolidated public sector (percent of GDP) — Total revenue:",
    "Consolidated public sector — Tax revenue:",
    "Consolidated public sector — Total expenditure:",
    "Net lending (+)/borrowing (-):",
    "Domestic public debt:",
    "Money and credit (percent change) — Broad money:",
    "Domestic credit:",
    "Private sector credit:",
    "Balance of payments — Current account balance:",
    "CBM reserves (gross) (In millions of U.S. dollars):",
    "Total external debt (billions of U.S. dollars):",
    "Total external debt (percent of GDP):",
    "Exchange rates (kyat/$, end of period) — Official exchange rate:",
    "Memorandum items — GDP (billions of kyats):",
    "Memorandum items — GDP (billions of US$):",
    "Memorandum items — GDP per capita (US$):",
    "[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)"
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