Country Report Myanmar June 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 in the face of 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 in double digits.

Monthly review

• Aung San Suu Kyi has been charged with breaking the terms of her house-arrest and in mid-May was moved to the notorious Insein prison in Yangon, where she was placed on trial.
• The juntas imprisonment of Aung San Suu Kyi has attracted widespread international condemnation. ASEAN has expressed "grave concern" for her health and called for her release.
• The NLD has yet to confirm whether it will participate in the planned 2010 election. Following a rare party conference in April, the group adopted a wait-and-see approach.
• Central government tax revenue has continued to rise rapidly. However, the junta remains heavily reliant on borrowing from the Central Bank of Myanmar, reflecting the poor state of the government's fiscal position.
• In January output of natural gas, crude oil, plywood and cotton yarn all fell sharply on a year-on-year basis, but growth in sales of electricity to industry (a proxy indicator for growth in the industrial sector) rose to 5.4%.
• The year-on-year rise in the consumer price index slowed to 16.3% in January, its lowest level since May 2006.

SOURCE: Country Report