Nation requires the creation of more financial institutions

 

“I think the government’s decision last year to establish the autonomous central bank is very important one. Myanmar needs to build more institutions to manage its economy. The central bank is crucial to that,” Matt Davies who led the IMF mission to Myanmar said.  

“It takes a while for any institution to build itself,” he said, adding that the financial sector is crucial for facilitating the growth.

“That (financial sector) itself can create growth.  Measures to invest infrastructure, electricity and health, education, are really worth laying foundation for that growth. And make sure that the government budget is moving the right direction. It takes a long time to turn the budget run. I believe the future (of Myanmar) will be very bright,” he continued.

Matt told in a press conference yesterday that Myanmar’s current economic outlook remains favourable, with real GDP growth of 7.3 per cent in the 2012-2013 fiscal year. Matt also pointed out that inflation is still a cause of concern for the Southeast Asian country while the Central Bank of Myanmar is building up its autonomy in implementing the monetary policy. The mission chief praised Myanmar government’s reforms on the last day of the 12-day mission.

“Myanmar is undergoing an exciting transition. Recent economic reforms include adopting a floating exchange rate and removing exchange restrictions; establishing an autonomous central bank; and significantly increasing spending on health and education. The authorities aim to build on these gains and achieve sustained, strong, and inclusive growth,” he said, adding that the authorities made good progress last year on their macroeconomic reform priorities.

Matt also pledged to continue the IMF’s support to Myanmar government’s implementation of economic reform agenda.

“We are prepared to assist the authorities in a range of ways, including policy advice, monitoring of reform progress and through intensive and tailored technical assistance delivered in close coordination with other donors to support capacity building.”

The IMF has been supporting Myanmar in a wide range of activities, including ensuring macroeconomic stability, building a framework and institutions for effective macro-economic management, building the central bank’s reserves, maintaining an appropriate fiscal deficit, liberalising the foreign exchange market, and building monetary and fiscal policy tools and institutions.

The mission visited Myanmar from January 9 to 21 for the second and final review of the Staff- Monitored Programme (SMP) for 2013. The mission met with central bank governor Kyaw Kyaw Maung, Union Minister for Finance Win Shein, other senior government officials, and representatives of the private sector and donors.