Myanmar's economy can grow 8.5 pct in current fiscal year - IMF

Tue Jun 17, 2014 11:05am GMT
 

By Jared Ferrie

YANGON, June 17 (Reuters) - Myanmar's economy should grow 8.5 percent during the current fiscal year, higher than earlier forecast thanks mainly to rising gas production and investment, the International Monetary Fund said on Tuesday.

In January, the IMF predicted that Myanmar would have 7.7 percent growth during the fiscal year that ends March 2015.

The fund left unchanged its forecast that inflation during the fiscal year will be 6.5 percent.

Myanmar has launched sweeping economic and political reforms under its quasi-civilian government, which came to power in 2011 following nearly half a century of military rule. The government has taken moves to attract foreign investment, create jobs and boost the country's weak infrastructure.

The IMF, which set up a monitoring program in Myanmar in 2013, said it would "intensify" its technical assistance and training. Team leader Matt Davies told Reuters the Central Bank of Myanmar had undergone "huge change" over the past two years, including gaining independence from the finance ministry and managing a floating exchange rate.

Davies welcomed Myanmar's decision to allow a handful of foreign banks to begin limited operations after they receive licences in September. However, he noted that their entry "will place further demands on macroeconomic policy and stretch supervision capacity".

Davies said he expects there will be more foreign investment in manufacturing, telecommunications and natural resources.

Last year, Myanmar awarded telecommunications licences to Qatar's Ooredoo and Norway's Telenor. Both companies are building networks throughout the country and are expected to launch service in the main cities within months.

In March, Myanmar awarded contracts to explore and operate offshore oil and gas blocks to companies including Royal Dutch Shell, Statoil, ConocoPhillips and Total. Myanmar exported $3.7 billion of gas in the fiscal year ended March 2013, up from $3.5 billion a year earlier. Most of the gas went to neighbouring Thailand. (Editing by Richard Borsuk)

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