BANGKOK–Myanmar’s economy is likely to post solid growth in the years ahead as the Southeast Asian country gradually embraces wide-ranging reforms, and gross domestic product could grow by 7%-8% a year for a decade or more, the Asian Development Bank said in a report released Monday
“At such growth rates, its GDP per capita would reach $2,000-$3,000 by 2030, more than three times the current level, propelling Myanmar safely into the ranks of the middle-income countries,” the ADB report said.
“With its rich natural resources and strategic location, the country shows good potential for growth. Myanmar could become one of the next rising stars in Asia if it can successfully leverage its rich endowments for economic development and growth.”
The bank forecast Myanmar economy would grow by 6.0% in 2012 and 6.3% in 2013.
The near-term outlook for Myanmar’s economy is relatively upbeat on the back of strong export earnings from resource commodities and a pick-up in foreign direct investment flows, the ADB said
Greater regional cooperation would unlock growth potential arising from increased trade and cross-border investment as Myanmar is strategically located between two Asian economic giants–China and India, the bank said.
Inflation is projected to reach 6.2% this year from 4.2% last year as the effect of a recent moderation in food prices fades. However, the ADB noted that inflation in Myanmar was historically high and variable.
Prices in Myanmar nearly quadrupled from 2001 to 2007, with an average annual inflation rate of 25.3%, partly due to the monetization of government debt by the Central Bank of Myanmar, the bank said.
Key constraints that may limit Myanmar’s economic development progress include insufficient fiscal resources and domestic fund mobilization, limited access to financing, deficient infrastructure, inadequate social services, and limited industrial diversification. Risks also include environmental degradation arising from industrialization and climate change, the ADB said.
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