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Statement by the Staff Representative on Myanmar March 12, 2018

Author(s):
International Monetary Fund. Asia and Pacific Dept
Published Date:
March 2018
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The information below has become available following the issuance of the staff report (SM/18/30). It does not alter the thrust of the staff appraisal.

1. There are signs of a continuing economic recovery. The Purchasing Managers’ Index in January indicated an economic expansion for a fourth straight month, signaling an improved near-term manufacturing outlook.

2. While more recent FDI inflow data are unavailable, leading indicators such as FDI project amounts approved by the Directorate of Investment and Company Administration for the first 10 months of 2017/18 show a marked deceleration since September 2017.

3. The authorities submitted to parliament a proposal for an income tax amnesty/voluntary disclosure program, but details remained to be finalized. The proposal is designed to allow a one-off opportunity to declare undeclared income at a lower penalty.

4. The external sector remained resilient with a stable exchange rate and gross foreign reserves at US$5.3 billion in January 2018, equivalent to about 3 months of prospective imports.

5. Private sector credit growth continued to moderate slightly to 26 percent (y/y) in November 2017, from 27 percent (y/y) in September 2017.

6. The authorities launched their Myanmar Sustainable Development Plan (MSDP) on February 26. The MSDP identifies a number of development priorities, reflecting multi-dimensional and vast development needs. While further work is needed to specify reform sequencing and integration with the medium term fiscal framework, the MSDP is a good first step towards setting reform direction, and building an inclusive development agenda.

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