## IMF Staff Completes 2019 Article IV Visit to Myanmar

_IMF News, December 20, 2019_

## Source details

**Canonical URL:** [IMF Staff Completes 2019 Article IV Visit to Myanmar](https://www.imf.org/en/news/articles/2019/12/20/pr19480-imf-staff-completes-2019-article-iv-visit-to-myanmar)

## Other formats

- [Markdown version](/en/news/articles/2019/12/20/pr19480-imf-staff-completes-2019-article-iv-visit-to-myanmar/index.md)
- [Structured JSON version](/en/news/articles/2019/12/20/pr19480-imf-staff-completes-2019-article-iv-visit-to-myanmar/index.json)
- [Bundle manifest](/en/news/articles/2019/12/20/pr19480-imf-staff-completes-2019-article-iv-visit-to-myanmar/bundle-manifest.json)

## Bibliographic details
- Published: December 20, 2019

---

### Mission summary and headline findings
- 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:
  - Growth is estimated at 6.5 percent in 2018/19, up slightly from 6.4 percent in 2017/18.
  - Fiscal deficit widened slightly to 3.5 percent of GDP in 2018/19, compared to 3.0 percent in 2017/18.
  - Current account deficit halved in 2018/19 to 2.0 percent of GDP.
  - 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).

### Medium-term outlook and risks
- 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:
  - 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.
  - External: rising trade tensions and global market volatility, higher crude oil prices, and spillovers from a slowdown in China.

### Policy recommendations
- Fiscal policy:
  - Aim to raise tax revenues that remain very low by international standards and boost SDG-related spending.
  - 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.
  - 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.
  - Strengthen profitability and governance of state economic enterprises (macro-critical).
  - New petroleum production sharing contracts should rely on a revised model contract to help maximize revenues and ensure transparency.
  - Expedite finalization of new power purchase agreements through enhanced inter-ministerial coordination with due regard to cost competitiveness and fiscal risks.
- Monetary and exchange rate policy:
  - Continue exchange rate flexibility to cushion external shocks.
  - Active control of monetary conditions and fading one-off supply-side pressures should reduce inflation.
  - Upgrade monetary and FX operational framework, including allowing greater interest rate flexibility, to anchor inflationary expectations and strengthen the monetary transmission mechanism.
  - 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.
- Financial sector and banking:
  - Ensure the banking sector is sufficiently capitalized, regulated, and supervised to support lending to productive sectors.
  - 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.
- Structural and development policy:
  - Continue reforms to improve governance and reduce the cost of doing business to attract private investment.
  - 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.
  - 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.
  - Continued capacity development to support reform implementation and institution building is critical to achieving the goals set in the MSDP.

### Financial and reform measures welcomed
- Recent reforms noted by staff:
  - Increase in electricity tariffs.
  - Liberalization of the financial sector including opening to foreign insurance companies and banks.
  - Move to greater exchange rate flexibility.
- Staff encouraged continuation and deepening of these reforms.

### Mission engagement
- Staff team met with:
  - Governor and Deputy Governors of the Central Bank of Myanmar.
  - Union Minister and Deputy Ministers of Ministry of Planning, Finance and Industry.
  - Senior government officials, members of parliament, private sector business and financial representatives, and development partners.
- IMF Communications contact: PRESS OFFICER: Keiko Utsunomiya; Phone: +1 202 623-7100; Email: MEDIA@IMF.org

### Selected economic indicators (2015/16–2021/22) — key figures preserved exactly as presented
- Real GDP (annual growth rates):
  - 2015/16: 6.4
  - 2016/17: 5.8
  - 2017/18: 6.5
  - 2018/19: 6.0
  - 2019/20: 6.2
  - 2020/21: (not shown)
  - 2021/22: (not shown)
- CPI (end-period; base year from 2014/15=2012):
  - 2015/16: 3.9
  - 2016/17: 3.4
  - 2017/18: 8.6
  - 2018/19: 9.5
  - 2019/20: 7.7
  - 2020/21: 6.6
- Consolidated public sector (percent of GDP) — Total revenue:
  - 2015/16: 19.6
  - 2016/17: 18.3
  - 2017/18: 18.8
  - 2018/19: 18.0
  - 2019/20: 18.1
  - 2020/21: 18.4
- Consolidated public sector — Tax revenue:
  - 2015/16: 7.1
  - 2016/17: 6.8
  - 2017/18: 7.2
  - 2018/19: 7.5
- Consolidated public sector — Total expenditure:
  - 2015/16: 23.4
  - 2016/17: 21.0
  - 2017/18: 21.8
  - 2018/19: 21.5
  - 2019/20: 22.2
  - 2020/21: 22.5
  - 2021/22: 22.8
- Net lending (+)/borrowing (-):
  - 2015/16: -3.9
  - 2016/17: -2.7
  - 2017/18: -3.0
  - 2018/19: -3.5
  - 2019/20: -4.1
  - 2020/21: -4.4
- Domestic public debt:
  - 2015/16: 22.0
  - 2016/17: 23.3
  - 2017/18: 26.3
  - 2018/19: 23.0
  - 2019/20: 23.5
  - 2020/21: 24.0
- Money and credit (percent change) — Broad money:
  - 2015/16: 16.5
  - 2016/17: 21.4
  - 2017/18: 18.6
  - 2018/19: 15.4
  - 2019/20: 12.6
  - 2020/21: 10.5
  - 2021/22: 10.8
- Domestic credit:
  - 2015/16: 30.1
  - 2016/17: 22.3
  - 2017/18: 14.5
  - 2018/19: 11.1
  - 2019/20: 11.7
- Private sector credit:
  - 2015/16: 33.9
  - 2016/17: 27.4
  - 2017/18: 21.2
  - 2018/19: 16.4
  - 2019/20: 12.9
- Balance of payments — Current account balance:
  - 2015/16: -4.2
  - 2016/17: -6.5
  - 2017/18: -2.0
  - 2018/19: -3.4
  - 2019/20: -3.7
- CBM reserves (gross) (In millions of U.S. dollars):
  - 2015/16: 4,835
  - 2016/17: 5,141
  - 2017/18: 5,462
  - 2018/19: 5,667
  - 2019/20: 5,830
  - 2020/21: 6,091
  - 2021/22: 6,549
- Total external debt (billions of U.S. dollars):
  - 2015/16: 12.7
  - 2016/17: 12.3
  - 2017/18: 18.9
- Total external debt (percent of GDP):
  - 2015/16: 20.0
  - 2016/17: 29.8
  - 2017/18: 24.1
  - 2018/19: 22.4
  - 2019/20: 21.1
- Exchange rates (kyat/$, end of period) — Official exchange rate:
  - 2015/16: 1,226.1
  - 2016/17: 1,357.7
  - 2017/18: 1,551.5
  - 2018/19: 1,533.0
- Memorandum items — GDP (billions of kyats):
  - 2015/16: 74,216
  - 2016/17: 82,700
  - 2017/18: 92,789
  - 2018/19: 105,012
  - 2019/20: 120,872
  - 2020/21: 138,076
  - 2021/22: 157,026
- Memorandum items — GDP (billions of US$):
  - 2015/16: 60.4
  - 2016/17: 61.5
  - 2017/18: 67.1
  - 2018/19: 68.5
  - 2019/20: 74.8
  - 2020/21: 81.8
  - 2021/22: 89.5
- Memorandum items — GDP per capita (US$):
  - 2015/16: 1,210
  - 2016/17: 1,267
  - 2017/18: 1,279
  - 2018/19: 1,242
  - 2019/20: 1,321
  - 2020/21: 1,440
  - 2021/22: 1,593

*Source: IMF staff statement concluding the 2019 Article IV visit to Myanmar (December 20, 2019).*

---


## 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/2019/12/20/pr19480-imf-staff-completes-2019-article-iv-visit-to-myanmar_