Myanmar Country Risk Report Q4 2018
Myanmar's real GDP growth likely accelerated to 6.4% in FY2017/18 (April-March), from 5.9% in the previous fiscal year, according to a World Bank report, and we maintain our forecast for growth to come in at 6.8% in FY2018/19. Our positive outlook on the economy is largely supported by the government's continued reform efforts and favourable demographics, which will likely attract more investment, particularly in the industrial sector.
The slow rate at which the peace process is progressing in Myanmar is a result of mutual distrust between the Tatmadaw and the EAOs, amid continued fighting. In the absence of a credible ceasefire agreement, we believe that trust will be difficult to rebuild, and this will likely see ethnic tensions persist over the coming years.
Myanmar remains a country in transition and a perceived deterioration in the political situation could lead to a sharp decrease in the amount of foreign direct investment, hindering growth.
Rising US interest rates could lead to a further drop in global liquidity and lower risk appetite, with emerging and frontier markets likely to bear the brunt of hot money outflows.
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