Over the past several years, Myanmar has undergone a process of economic and political liberalisation. This led the US to lift sanctions on the country that had been in place for almost two decades, bolstering prospects for growth in investment and incomes. The transition to democratically elected governments helped strengthen relations with the international community. But those relations have become strained over the displacement of the Rohingya minority.
Following 7%-8% annual growth over 2013-2015, growth has slowed to around 6% per annum since 2016. More recently, the economy is slowly recovering following bouts of currency devaluation and high inflation that hurt investment, manufacturing and services activity. The IMF expects growth will average 6.2% per annum over five years to 2024, supported by gradual strengthening investment in infrastructure and sectors undergoing liberalisation, such as the wholesale and retail, insurance and banking sectors. Greater integration in ASEAN will support investment and export prospects. The baseline outlook assumes continued progress on reform implementation, such as improving budgetary processes, and macroeconomic and political stability. Risks are firmly to the downside. In particular, failure to resolve the Rohingya crisis could take a larger and longer-lasting toll on foreign investment in Myanmar.