Economy

GDP– In the last ten years the GDP of Myanmar grew by an astounding 135% starting in 2009. Myanmar’s GDP stood at almost US$ 87 billion in the year 2019. Myanmar’s contribution in the GDP of the ASEAN is 2.9%. The chart below displays the journey which the Myanmar economy traversed in the last 10 years. The country has faced socio-economic problems in the past decade as a result of which the growth of GDP has been very erratic.

 

 

GDP Growth (%)- The GDP growth of Myanmar as mentioned has been very erratic. In the year 2019 the GDP grew by a mere 2.8% which was a big drop from the preceding year where the GDP growth rate was 6.75%.The GDP grew leaps and bounds in the first of the decade between 2010-2015. The following chart shows the comparison between Myanmar and the other countries in the ASEAN. On comparison with the OECD and the G7, Myanmar has consistently outperformed them.

 

 

Inflation Rate-The following chart depicts the inflation rate of the economy over the past 5 years. In 2019, the inflation rate reached 10.9%.

 

 

GDP Per Capita – Myanmar recorded a GDP per capita of US$ 1333 in 2020, which is the lowest amongst the 10 ASEAN countries. The chart below indicates the GDP per capita of all the ASEAN countries between 2013-2018. Singapore leads the ASEAN in terms of GDP per capita.

 

 

GDP Per Capita Growth Rate– Given the socio-political scenario and the erratic nature of the GDP of the country, the GDP per capita growth rate of the country also fluctuates inconsistently. As depicted in the chart below the country experienced negative GDP per capita in 2015. In the year 2018 the country experienced the highest GDP per capita growth rate of 15%. If the GDP per capita grows at the same rate it can be an opportunity for investors to capitalise on.

 

 

Sectoral contribution to GDP – Process & Manufacturing which reduced from 23.9% in 2016-17 to 21% in 2017-18, still has the highest contribution to the GDP. This is primarily because of the low labour costs and favourable external trade environment.In 2016-17 the FDI related to the manufacturing was US$ 1.8 billion. The second highest contribution to the GDP is that of Trade at 18.4% followed by agriculture at 10.2%. The following pie-chart depicts the sectoral division of the GDP of Myanmar:

 

 

In terms of broad classification the GDP can be divided into three sectors- Services, Industry and Agriculture.

 

Services

In the last 10 years, the contribution of the services sector has been the highest consistently. Further, it has been observed from the chart as given below that there has been steady increase in the contribution of the services sector over the years. In 2018, the sector contributed roughly 44.90 % to the GDP of the nation. The main contributors of this sector are power, mining, manufacturing, etc. A major reason for this is the abundance resources of available in the country.

 

 

 

Industry

Similar to the services sector the contribution of the industrial sector to the GDP of Myanmar has had a steady increase. As per the World Bank, industrial contribution to GDP peaked in 2021 with 32.70%. The sector has seen a 43.4% increase in the contribution of the sector between the years 2010-2018.

 

 

 

Agriculture

From contributing 36% to the GDP in 2010, the agriculture sector has seen a significant reduction in the percentage contributed to the GDP as it contributed 22.40% in 2021. This shows the shift of the economy from being agrarian towards industrialisation. As reflected in the chart the sector’s contribution has reduced by 42% between 2010 & 2018.

 

 

Employment by Sector- As per the ILO, the employment by sector is as follows:-

 

One important thing to notice is that Agriculture is the labour-intensive industry which has the maximum number of people employed, but then the contribution to GDP is the lowest. Thus, it shows the backwardness in the technology and infrastructure used in the generation of output in the agricultural sector.

 

Primary Trade Partners – Trade partners of Myanmar are categorised as importing partners and exporting partners. The top 5 export markets for Myanmar in 2018 were as follows:

 

 

 

The top 5 import markets for Myanmar in 2018 were as follows:

 

Over the years Myanmar has focused a lot on its trade. As a result of this the trade grew at 8.27% compared to a global growth of 3.50%, which shows that trade has significant potential owing to the strategic geographical features of the land. In 2018, the export income amounted to US$ 16,671,612.50 and the import bill amounted to US$ 19,345,459.57. As a result, the country has a negative trade balance of US$ 2,673,847.07.

 

Product contribution to exports and imports – The charts below depict the top 5 export and import items of Myanmar.

 

 

 

 

 

From the major export items one thing to be noted is that Liquid Natural Gas makes up majority of the share of the exports, which indicates that the country is efficient in the production of the same. Similarly, for the import bill Petroleum oils take up a major chunk indicating the deficiency of the resource in the country. Among other products, consumer goods are make-up 57% and 43% of the exports and imports respectively. Intermediate goods make up 21% and 30% of exports and imports.

 

Exports to GDP Ratio – The following chart depicts the exports to GDP ratio of Myanmar between 2010 & 2018. As of 2018 the Exports to GDP lies at 30%.

 

 

Debt to GDP Ratio – Between 2015 & 2020 the National Debt of Myanmar has increased by 80% from US$ 17 billion to US$ 30 billion. In FY 2019-20 the debt grew by 14%.

 

 

In 2018, the Debt to GDP ratio of Myanmar was 38.16%, as per the IMF.

 

 

Trade Agreements –Trade is the second biggest contributor to the GDP of the country. Having an open economy with a strategic location, Myanmar is part of the ASEAN Free Trade Agreement (AFTA) and several other plurilateral Free Trade Agreements (FTAs). As a result of these agreements businesses in Myanmar can carry out tariff-free trade with multiple nations. A comparative view of 6 major ASEAN economies, as seen in the graph below, reveals that Myanmar has a lot of catching up to do, relative to its other ASEAN peers.

 

 

Myanmar’s Trade Agreements can be classified into the following two groups:
– Multilateral Trade Agreements (MTAs)
– Bloc – Bloc Agreements

 

 

*GSTP member countries – Algeria; Argentina; Bangladesh; Benin; Bolivia, Plurinational State of Bolivia; Brazil; Cameroon; Chile; Colombia; Cuba; Ecuador; Egypt; Ghana; Guinea; Guyana; India; Indonesia; Iran; Iraq; Korea, Democratic People’s Republic of; Korea, Republic of; Libya; Malaysia; Mexico; Morocco; Mozambique; Myanmar; Nicaragua; Nigeria; Pakistan; Peru; Philippines; Singapore; Sri Lanka; Sudan; Tanzania; Thailand; Trinidad and Tobago; Tunisia; Venezuela, Bolivarian Republic of; Vietnam; Zimbabwe

 

 

FTA – Free Trade Agreements

EIA – Economic Integration Agreement

PSA – Partial Scope Agreement

 

To learn more about Myanmar’s trade agreements, follow the link below:

https://www.unescap.org/content/aptiad/

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