Myanmar Economy in 2018

After the establishment of democratically elected government in April 2018, Myanmar’s economic forecast remains broadly positive. Many foreign investors expect a massive fast-growing economy and wish to enter into Myanmar’s untapped market. However, Myanmar has been tarnished by a series of conflict escalation in Rakhine State, northwestern Myanmar, which has had a negative impact on the country’s image, and reduced foreign investment, especially from European countries. Nevertheless, Myanmar’s GDP growth rate is expected to reach 7 percent in the 2018 – 2019 fiscal year, based on an increased inflow of foreign investment funds, and increased investment in infrastructure.

The Myanmar government has implemented a series of economic reforms. In August 2018, the Myanmar Companies Law was enforced, replacing the previous 1914 Companies Act. Under the new law, foreigners are permitted to own up to 35 percent of shares in a local company. The new law also encompasses a wide range of regulations, which will affect local and international investors. These include regulations on share transactions, dividends, reduction of initial capital and shareholder authorities. There was also liberalization of other sectors, such as education services, wholesale and retail by foreign companies and joint venture companies. Myanmar hopes to attract more foreign investment by focusing on infrastructure development, such as ports, roads, highways, railways, and power generation.

Foreign Investment

            Foreign investors’ interest in Myanmar remains strong. Foreign direct investment (FDI) inflows show signs of potential growth. However, foreign investment is slowing down due to the unfolding humanitarian crisis in northern Rakhine. This is especially the case with western investors, who are still withholding funds. Myanmar received US $5.7 billion in foreign direct investment for 222 projects from the previous 2017 – 2018 fiscal year, which ended on 31 March 2018. According to the Directorate of Investment and Company (DICA), Myanmar expects to draw FDI totaling US$ 5.8 billion in the 2018-2019 fiscal year, which started on 1 October 2018. However, U Aung Naing Oo, Secretary of the Myanmar Investment Commission (MIC), informed that the 2018 – 2019 FDI forecast excluded investments from the West. In the six months interim period before the new fiscal year during April – September 2018, FID totaled US $ 1.4 billion, which is lower than the forecasted US$ 3 billion.

            The Union of Myanmar Federation of Chambers of Commerce and Industry (UMFCCI) will host the Invest Myanmar Summit during 28 – 29 January 2019 in Nay Pyi Taw. The Summit targets investors from nine countries, including the US, UK, China, Hong Kong, India, Japan, South Korea, Australia, Singapore, and Thailand. It aims to draw more FDI into areas beyond Yangon, such as Mandalay Region, Shan State, Ayeywarwady Region, Kayin State, Mon State, and Tanintharyi Region. In addition, the Summit seeks to promote eight sectors, including manufacturing, garment production, electricity and energy, foodstuffs, tourism, education, healthcare, and land development.

For further information, please click: Non - Paper on Myanmar Economic in 2018.pdf

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