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Quick Facts
- Population:
- GDP (PPP):
- $328.4 billion
- 6.7% growth
- 6.8% 5-year compound annual growth
- $6,217 per capita
- Unemployment:
- Inflation (CPI):
- FDI Inflow:
Burma’s economic freedom score is 54.0, making its economy the 141st freest in the 2020 Index. Its overall score has increased by 0.4 point, with a particularly notable improvement in monetary freedom. Burma is ranked 35th among 42 countries in the Asia–Pacific region, and its overall score is well below the regional and world averages.
Nevertheless, economic freedom has continued to improve slowly, and the economy is ranked in the mostly unfree category for the fourth year in a row since first escaping from the ranks of the repressed in 2017. GDP growth has been exceptionally robust, led by heavy investment and growing domestic demand.
For Burma’s economy to continue to accelerate on an upward trajectory, the government will have to implement deep, broad, and well-institutionalized reforms that dramatically improve respect for property rights, judicial effectiveness, and government integrity. Additional reforms will also be needed to improve aspects of investment freedom and financial freedom.
Background
Burma’s slow transition from military dictatorship advanced when National League for Democracy (NLD) leader Aung San Suu Kyi was released from detention in 2010. She now acts as state counsellor and leader of the NLD, which won an absolute parliamentary majority in 2015. The army remains a major political force and controls several cabinet portfolios, including defense, border, and home affairs. Burma is scheduled to hold elections in 2020. The country has received international censure for its treatment of the Rohingya and other ethnic minorities. It has also been criticized for a stalled political reform process. Wages in Burma remain low compared with wages elsewhere in Asia, and more than 25 percent of the population lives in poverty.
Property rights for large plots of land are commonly disputed because ownership is not well established, particularly following a half-century of military expropriations. The judiciary is not independent, and courts at times fail to rule impartially. The country has a deeply rooted problem with graft but still lacks a framework that would support a sustained, systematic, and effective fight against 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 6.1 percent of total domestic income. Government spending has amounted to 20.4 percent of the country’s output (GDP) over the past three years, and budget deficits have averaged 2.6 percent of GDP. Public debt is equivalent to 38.2 percent of GDP.
The government has reduced the cost of starting a business by lowering registration fees, and the management of power outages has been improved. Nevertheless, Burma ranked in the bottom 10 percent of countries in the World Bank’s 2019 Doing Business report. Due to decades of counterproductive education policies, the demand for skilled labor and managerial staff far outstrips supply. Electricity tariffs have been raised to reduce subsidy costs.
The total value of exports and imports of goods and services equals 48.0 percent of GDP. The average applied tariff rate is 4.6 percent, and one nontariff measure is in force. However, other barriers to trade persist. The government’s reforms to attract foreign investment have included a managed currency float and operational independence for the central bank, but overall progress has been slow. Access to credit remains poor.