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Burma economy: IMF says growth to accelerate further

Category: Business

Published: 9th May 2012 03:12:40

Burma's growth is set to accelerate, driven by commodity exports and increased investment, the International Monetary Fund (IMF) has said.

The IMF has forecast growth of 6% for the next financial year, up from 5.5% in the current year.

Burma has introduced economic and political reforms, including floating its currency, to open its markets.

Various countries have also lifted some of the sanctions imposed against it.

"It has very rich natural resources, a young labour force and is close to some of the most dynamic economies in the world," said Meral Karasulu, IMF's Mission Chief for Burma.

Earlier this year, Burma moved to a managed float for its currency, the kyat, in what is seen as the boldest economic reform to date.

Prior to being floated, the kyat had an official as well as a black market rate, with the unofficial rate being almost 125 times that of the official one.

Many analysts said that the difference in rates had deterred firms from investing in Burma.

Under a managed float system a currency's exchange rate is determined by the market. However, the central bank publishes a daily reference exchange rate to influence the market.

Since the float, the currency's official rate has been set close to the black market rate.

However the IMF said that for Burma to realise its growth potential, it needs to introduce further economic reforms.

Ms Karasulu said that Burma needed to focus on "improving business and investment climate" and "developing the financial sector".

"Ideally these should coincide with gradually liberalising trade and foreign direct investment," she added.

Source:
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BBC News, 2012. Burma economy: IMF says growth to accelerate further [Online] (Updated 9th May 2012)
Available at: http://www.ukwirednews.com/news/1427285/Burma-economy-IMF-says-growth-to-accelerate-further [Accessed 31st Jul 2014]

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