Myanmar needs broad reforms to keep growth rapid: IMF

PUBLISHED : Wednesday, 18 June, 2014, 1:28pm
UPDATED : Thursday, 19 June, 2014, 8:56am

The International Monetary Fund said Myanmar's economy is expected to build on already rapid growth but that momentum was at risk unless broad reforms are undertaken.

An IMF team met with authorities during a June 4-17 visit to Myanmar as part of the fund's annual review of a country's economy, known as Article IV consultations.

"Myanmar is well placed to build on its recent economic reforms and embark on an extended period of rapid growth, emulating its regional peers," Matt Davies, who headed the team, said in a statement.

"However, ensuring that this growth is sustainable and inclusive requires decisive implementation of a broad range of policy and structural reforms."

The IMF predicted Myanmar's economy was poised for even slightly stronger growth of 8.5 per cent in the fiscal year ending March next year than in the prior year - when gross domestic product grew 8.25 per cent - owing to rising gas production and investment.

Inflation was likely to remain contained around an annual rate of 6.5 per cent this year, while money and credit flowing to the economy would continue to expand at double-digit rates, the Washington-based lender said.

But the IMF saw significant risks to the outlook for the country, which was left impoverished after decades of economic mismanagement under the former junta, as well as years of sanctions by the West.

Large capital inflows will strain the country's "still-infant" macroeconomic management tools, it said.