Washington, D.C, 12 Oct — As ongoing transformation in Myanmar is unleashing the remarkable growth potential of the country, the International Monetary Fund (IMF) is quite optimistic about Myanmar’s more than 8 percent projected growth rate, said IMF economists at a regional press briefing on Friday.
“Growth will be more than 8 percent this year and certainly to grow that rapidly over the medium term”, Jerry Schiff, deputy director of IMF’s Asia and Pacific Department told the Global New Light of Myanmar.
But, the IMF economist pointed out the economic institutions that are still developing, saying that they will face a lot of challenges in dealing with new capital inflows and technical assistance of international organizations including the IMF.
“Certainly, there are a lot of works to be done in the coming years,” said the APD deputy director who is also one of the authors of the latest Asian and Pacific economic outlook update report.
In its suggestion following the conclusion of IMF executive board’s 2014 Article IV Consultation with Myanmar, the IMF urged the country to maintain near-term macroeconomic stability while building modern institutions and sound policy frameworks to manage the budget and financial sector.
“Medium and long-term prospects remain strong, but require sustained policy and institutional reforms even as the authorities’ capacity is being strained”, said the IMF in its statement.
The World Economic Outlook report indicates Myanmar’s Gross Domestic Product (GDP) growth is projected to see 8.5 percent this year and next year.
Regarding foreign bank entry in Myanmar, Changyong Rhee, director of the Asia and Pacific
Department commented on foreign bank cooperation.
“We are recommending not to allow them (foreign banks) to start their operation before the enactment of the foreign bank operation law and before the system is built,” said Mr. Rhee who led the press conference on October 2014 Asia and Pacific Regional Economic Outlook Update.
Myanmar recently approved preliminary banking licenses for nine foreign banks — Australia and New Zealand Banking Group Limited (ANZ), Bangkok Bank, Bank of Tokyo-Mitsubishi UFJ (BTMU), Industrial and Commercial Bank of China (ICBC), Malayan Banking Berhad (Maybank) Mizuho Bank, Oversea-Chinese Banking Corporation (OCBC), Sumitomo Mitsui Banking Corporation (SMBC) and United Overseas Bank (UOB).
The director added that Myanmar needs to take a little more time to prepare for the sound system, enhancing its capacity to supervise and regulate the nine approved financial institutions and then start operation.
According to the announcement of the foreign bank licensing committee, applicants will have to fulfill commitments they made in their answer to the applications, ensure functional banking operation and comply with requirements from the Central Bank of Myanmar during the 12-month period for the award of final license.