Yangon (AsiaNews/Agencies) - Myanmar's economy is set to grow an estimated 6.8 percent next year, placing it among Southeast Asia's fastest growing economies, in a region already experience rapid growth. Energy and commodities exports, foreign investment, services and construction will drive expansion. However, the government will have to contend with rising inflation, which threatens especially the poor, the World Bank said on Wednesday.
"It's not just a historical trend," said Khwima Nthara, the Bank's senior country economist. According to referring to the bank's forecast, Myanmar will outpace the average annual expansion of 5.1 per cent expected for the region this year and the next.
"This is very much attributable to the new wave of reforms" under President Thein Sein and his government, which ended decades of isolation imposed by the once ruling military dictatorship.
Yet, despite abundant resources, a population of about 60 million and a land mass the size of Britain and France combined, Myanmar's economy is one Asia's smallest and least developed, hurt by repression, fiscal mismanagement and misappropriation by the military junta and its cronies, as well as Western sanctions.
The (partly) reformist, civilian-led government that took office in March 2011 focused on greater political and economic openness. It freed long-time opposition leader Aung San Suu Kyi and hundreds of political prisoners and refocused government policy on attracting foreign capital.
In fact, foreign direct investment in Myanmar rose to US$ 2.7 billion in 2012-13 from US$ 1.9 billion in 2011-12.
Although Myanmar's official data have not been corroborated independently, the government's investment commission said that US$ 54 million of foreign investment flowed in in September, mostly destined for the manufacturing, agriculture, mining, and hotels and tourism sectors that are expected to drive future growth.
For the World Bank, inflation remains a concern, rising by 7.3 percent in August, fuelled by higher costs for housing and food, particularly rice.
Prices need to be kept under control as the majority of the population could suffer, Nthara said, adding, "It's certainly a worrying trend. Inflation hits the poor most."