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- GDP (PPP):
- $283.5 billion
- 7.0% growth
- 7.4% 5-year compound annual growth
- $5,469 per capita
- Inflation (CPI):
- FDI Inflow:
Burma’s economy has undergone notable changes. Economic sanctions have been eased or lifted, and the government has launched reforms to modernize the economic system. A new banking and finance law that lays the foundations for more efficient licensing of financial institutions has been ratified. In 2016, the lower house of parliament also approved a new investment law.
Long-standing structural problems include poor public finance management and underdeveloped legal and regulatory frameworks. Fragile monetary stability largely reflects excessive money creation to fund fiscal deficits. Arbitrary taxation policies and marginal enforcement of property rights have driven many enterprises into the informal sector.
Burma’s slow transition from military dictatorship continues. Beginning in 2010, it experimented with some political and economic reform. National League for Democracy leader Aung San Suu Kyi, released from jail in November 2010, now acts as state counsellor and leader of the NLD. Following a general election in 2015 that gave the NLD an absolute majority, parliament elected Suu Kyi confidant Htin Kyaw as president. The army remains a major political force and controls several cabinet portfolios, including defense, foreign, border, and home affairs. The United States and the European Union have continued to ease sanctions in response to political changes, but sectarian violence and persecution of Muslims and Christians continue.
Protection of property rights is weak. There continue to be numerous cases of sometimes violent land-grabs and forced evictions without sufficient compensation by state security officials. The judiciary is not independent, and judicial decisions are heavily influenced by the executive. The budget process has become more open, but the government has not taken significant steps to curb rampant national and local corruption.
The top individual income tax rate is 20 percent, and the top corporate tax rate is 30 percent. Other taxes include commercial and capital gains taxes. The overall tax burden equals 9.2 percent of total domestic income. Government spending has amounted to 24.8 percent of total output (GDP) over the past three years, and budget deficits have averaged 2.2 percent of GDP. Public debt is equivalent to 32.0 percent of GDP.
The regulatory system lacks transparency and clarity, and inconsistent enforcement of regulations injects uncertainty into business decision-making. The labor market lacks flexibility, and informal-sector employment is substantial. The government intends to make public spending more efficient, improve budget transparency, and privatize some loss-making state-owned enterprises.
Trade is moderately important to Burma’s economy; the value of exports and imports taken together equals 34 percent of GDP. The average applied tariff rate is 2.9 percent. Several sectors, including land ownership, are closed to foreign investment, and state-owned enterprises significantly distort the economy. Four foreign banks were permitted to operate in 2016, adding to the nine that were licensed in 2014. State-owned banks still account for more than half of total banking-sector assets.