Myanmar Central Bank data (www.cbm.gov.mm) shows that the annual inflation rate for 2017 has
been successfully contained at 4.7%.
Achieving below 5% of annualized inflation rate at the current stage of
development in Myanmar is nothing short of an excellent achievement and near
miracle.
Is this the good work of the current government and
its team of international advisers, including long-term friend of the country and economic guru Professor
Sean Turnell? (#SeanTurnell) Or does the Central Bank administration solely responsible for
this? Or IMF or World Bank or Asian Development Bank? Or all of the above?
Actually we at the Myanmar Strategy do not care, to be honest.
We are just so happy to see this positive economic
data for 2017 and decided to highlight how this should benefit the country and
support the fragile foundation for progress of the economy in the long run.
You may be wondering why are we making a big deal
out of this ‘inflation’ data? Because Myanmar needs a stable outlook in the
market (we mean the real market where the real exchange of rice, vegetables,
fish and so on are taking place, not just financial market with some flashy
electronic boards showing stock prices) in the current stage of progress in the
economy. Average working family in Myanmar use nearly 70% of monthly income on
food items. Therefore stable price index for food and other basic needs would
allow the same working family (and the employing organisation) to focus on
variety of other issues instead of tackling the issue of basic but very
important food needs and affordability.
Also, Myanmar Strategy hopes that this positively
low trend of inflation would continue in order to form a strong base and
support the stable progress for the country under the current trend. The
administration can then further focus on various other challenges such as infrastructure
and basic services development, education and human resources development, healthcare
improvement, and overall economic growth for the country.
As a comparison, Vietnam, our ASEAN neighbour with
further up the development ladder, reported nearly 7% of annual inflation as
recently as 2013 (it was 18.7% in 2011 followed by 9.1% in 2012). Indonesia, another
ASEAN neighbour, reported 6.4% inflation for 2013-2015 each of three years in a
row.
Therefore, Myanmar Strategy is cautiously
optimistic about the future of Myanmar market on behalf of our various clients
– especially with a below 5% inflation rate, nearly 8% of projected annual GDP
growth for 2018, and low single digit of unemployment in Myanmar.
Myanmar Strategy continues to wish that this
positive trend may continue well into 2018 and many more positive and
prosperous years to follow thereafter.
God bless.
Our recently published Myanmar Strategy Insights:
>> 4th January 2018: Myanmar WishList for 2018
Inflation might be 4.7%, but more than half the population lives rural settings, and still the are complaining about price rises. Recently the minister told them to eat less In the centres, Yangon and Mandalay inflation is way higher. Downtown Yangon, a small 2-bedroom apartment is $800/mth, not an expensive place for ex-pats. the average wage is somewhere around 120$/mth and a high wage is considered $500.
ReplyDeleteThank you, Mr Farrell, for your comment. All valid points indeed. Some good news though is that poverty level in Myanmar stood at 30% in 2015 (if we could call it good news) as compared to 50% ten years earlier in 2005, based on World Bank stats released in 2017. We strongly believe that Myanmar as a country and "corporate Myanmar" is making excellent progress.
DeleteStarting from a very low and challenging base point, the recent progress may not be felt yet by the majority of population that is working so hard to make ends meet. But it's a progress towards the right direction nonetheless and would definitely see a much better future for current and future generations, in our humble opinion.
Thank you.