Country Report Myanmar July 2009

Outlook for 2009-10

• The State Peace and Development Council (SPDC, the ruling military junta) will continue to push ahead with its so-called road map to democracy, with the objective of legitimising its hold on power.
• The junta will seek to ensure that Aung San Suu Kyi, the popular leader of the main opposition party, the National League for Democracy (NLD), does not play a direct role in the planned election in 2010.
• The junta will continue to face sanctions from a number of Western governments, but it remains unlikely that the Association of South-East Asian Nations (ASEAN) will take punitive action against the junta.
• The government remains focused on spending heavily on the military, with few (if any) initiatives in the pipeline to support households and businesses or to stimulate the economy amid the global economic downturn.
• Official data may continue to show real GDP expanding at an implausibly rapid pace, but the Economist Intelligence Unit forecasts that growth will remain weak in 2009-10.
• Based on the official price series, in 2009-10 inflation will fall from the high levels that it reached in 2008, but it will remain close to double digits.

Monthly review

• The focus of attention in recent weeks has been on the highly controversial trial of Aung San Suu Kyi relating to dubious charges that she has violated the terms of her house-arrest.
• There has been strong international condemnation of Aung San Suu Kyi's trial, which for the most part has been held behind closed doors.
• The fiscal position remains weak, and as a result the government has continued to borrow heavily from the Central Bank of Myanmar.
• Output of natural gas, crude oil, plywood and cotton yarn all fell sharply in February on a year-on-year basis, while sales of electricity to industry (a proxy indicator of industrial growth) dropped by 7.7% in the same month.
• National rice production has picked up, despite continued problems in the Irrawaddy delta, which suffered severe damage when it was struck by Cyclone Nargis in May? 2008.
• Year-on-year consumer price inflation has continued to slow, dropping to 12.7% in February, down from 16.3% in January and 26.8% in 2008 as a whole.
• Merchandise exports and imports both fell in the first two months of 2009 on a year-on-year basis.

Source: Country Report

This report covers the following industry codes:
SIC Code: 10
NAICS Code: 212;11