The latest Outlook Report 2016 of the Asian Development Bank predicts that Asia’s fastest growing economy this year will come from… Myanmar. ADB Repot “Asian Development Outlook 2016” indicates that the country’s economy is expected to grow 8.4% in 2016 -four points more than Southeast Asia’s average growth. It would be a strong acceleration from 2015 which was partially affected by a cyclone and massive flooding and landslides. Natural catastrophes cost the country an estimated US$1.5 billion, equal to a staggering 3% of the country’s GDP as one fifth of the country’s farm land was devastated.
GDP growth still managed to reach last year 7.2%. According to the ADB report, the storm had little effect as the rest of the economy continued to boom. Myanmar economic strength is largely based on garment and natural gas exports as well as tourism. Garment exports were up by 28% last year while gas exports increased also slightly.
Foreign Direct Investments reached over US$23 billion over the last five years during the transitional military government. In fiscal year 2014-2015, FDI reached alone US$8 billion. Alone in tourism, total investments reached US$1.2 billion during the five year tenure of the transitional government. Investments were mostly directed into the construction of new hotels. The trend is likely to accelerate as the country has seen a mostly peaceful transition to full democracy.
A star in Myanmar skies continues to be tourism. Tourism was also a major driver of the economy with 4.7 million arrivals in 2015 with about 70% of visitors entering overland from neighbouring countries. Spending by tourists rose by 19% to $2.1 billion in 2015.
Despite the strong growth, Myanmar is facing significant economic challenges particularly with deficient infrastructure. Myanmar’s transport infrastructure, after decades of under-investment, provides poor access to markets and services, perpetuates poverty and regional inequality, and hampers business development. ADB estimates that $60 billion is needed through 2030 to upgrade transport systems to a standard seen in other countries at a similar stage of development.