Burma Economy Profile 2009

Economy - overview

Burma, a resource-rich country, suffers from pervasive government controls, inefficient economic policies, and rural poverty. Despite Burma's increasing oil and gas revenue, socio-economic conditions have deteriorated because of the regime's mismanagement of the economy. The economy suffers from serious macroeconomic imbalances - including rising inflation, fiscal deficits, multiple official exchange rates that overvalue the Burmese kyat, a distorted interest rate regime, unreliable statistics, and an inability to reconcile national accounts to determine a realistic GDP figure. Most overseas development assistance ceased after the junta began to suppress the democracy movement in 1988 and subsequently refused to honor the results of the 1990 legislative elections. In response to the government of Burma's attack in May 2003 on AUNG SAN SUU KYI and her convoy, the US imposed new economic sanctions in August 2003 including a ban on imports of Burmese products and a ban on provision of financial services by US persons. Further, a poor investment climate hampers the inflow of foreign investment. Foreign investors have shied away from nearly every sector except for natural gas and power generation. The business climate is widely perceived as opaque, corrupt, and highly inefficient. The most productive sectors will continue to be in extractive industries - especially oil and gas, mining, and timber - with the latter causing significant environmental degradation. Other areas, such as manufacturing and services, are struggling with inadequate infrastructure, unpredictable import/export policies, deteriorating health and education systems, and endemic corruption. A major banking crisis in 2003 shuttered 20 private banks and disrupted the economy. As of 2008, the largest private banks operated under tight restrictions, limiting the private sector's access to formal credit. The September 2007 crackdown on prodemocracy demonstrators, including thousands of monks, strained the economy as the tourism industry, which directly employs about 500,000 people, suffered dramatic declines in foreign visitor levels. In November 2007, the European Union announced new sanctions banning investment and trade in Burmese gems, timber, and precious stones, while the United States expanded its sanctions list to include more Burmese government and military officials and their family members, as well as prominent regime business cronies, their family members, and associated companies. Official statistics are inaccurate. In July 2008 the President signed into law the Tom LANTOS JADE (Junta's Anti-Democratic Efforts) Act of 2008, imposing new targeted sanctions on the regime. Published statistics on foreign trade are greatly understated because of the size of the black market and unofficial border trade - often estimated to be as large as the official economy. Though the Burmese government has good economic relations with its neighbors, better investment and business climates and an improved political situation are needed to promote serious foreign investment, exports, and tourism.

GDP (purchasing power parity)

$55.13 billion (2008 est.)
$54.54 billion (2007 est.)
$52.74 billion (2006 est.)
note: data are in 2008 US dollars

GDP (official exchange rate)

$27.18 billion (2008 est.)

GDP - real growth rate

1.1% (2008 est.)
3.4% (2007 est.)
3.4% (2006 est.)

GDP - per capita (PPP)

$1,200 (2008 est.)
$1,200 (2007 est.)
$1,100 (2006 est.)
note: data are in 2008 US dollars

GDP - composition by sector

agriculture: 40.9%
industry: 19.8%
services: 39.2% (2008 est.)

Population below poverty line

32.7% (2007 est.)

Labor force

30.04 million (2008 est.)

Labor force - by occupation

agriculture: 70%
industry: 7%
services: 23% (2001)

Unemployment rate

9.5% (2008 est.)
5.2% (2007 est.)

Household income or consumption by percentage share

lowest 10%: 2.8%
highest 10%: 32.4% (1998)

Investment (gross fixed)

14.1% of GDP (2008 est.)

Budget

revenues: $1 billion
expenditures: $1.805 billion (2008 est.)

Inflation rate (consumer prices)

26.8% (2008 est.)
35% (2007 est.)

Central bank discount rate

NA% (31 December 2008)
12% (31 December 2007)

Commercial bank prime lending rate

NA% (31 December 2008)
17% (31 December 2007)

Stock of money

$NA (31 December 2008)
$598 billion (31 December 2007)
note: this number reflects the vastly overvalued official exchange rate of 5.38 kyat per dollar; at the unofficial black market rate of 1305 kyat per dollar, the stock of kyats would equal only US$2.465 billion and Burma's velocity of money (the number of times money turns over in the course of a year) would be six, in line with the velocity of money for other countries in the region

Stock of quasi money

$NA (31 December 2008)
$216.9 billion (31 December 2007)

Stock of domestic credit

$NA (31 December 2008)
$887.7 billion (31 December 2007)

Industries

agricultural processing; wood and wood products; copper, tin, tungsten, iron; cement, construction materials; pharmaceuticals; fertilizer; oil and natural gas; garments, jade and gems

Industrial production growth rate

7.8% (2008 est.)

Electricity - production

5.961 billion kWh (2006 est.)

Electricity - production by source

fossil fuel: 44.5%
hydro: 43.4%
nuclear: 0%
other: 12.1% (2002)

Electricity - consumption

4.289 billion kWh (2006 est.)

Electricity - exports

0 kWh (2007 est.)

Electricity - imports

0 kWh (2007 est.)

Oil - production

21,900 bbl/day (2007 est.)

Oil - consumption

43,140 bbl/day (2006 est.)

Oil - imports

22,180 bbl/day (2005 est.)

Oil - exports

5,000 bbl/day (2006 est.)

Oil - proved reserves

50 million bbl (1 January 2008 est.)

Natural gas - production

12.6 billion cu m (2006 est.)

Natural gas - consumption

3.62 billion cu m (2006 est.)

Natural gas - exports

9.9 billion cu m (2007 est.)

Natural gas - imports

0 cu m (2007 est.)

Natural gas - proved reserves

283.2 billion cu m (1 January 2008 est.)

Current Account Balance

$1.018 billion (2008 est.)
$1.285 billion (2007 est.)

Agriculture - products

rice, pulses, beans, sesame, groundnuts, sugarcane; hardwood; fish and fish products

Exports

$6.348 billion (2008 est.)
$6.17 billion (2007 est.)
note: official export figures are grossly underestimated due to the value of timber, gems, narcotics, rice, and other products smuggled to Thailand, China, and Bangladesh

Exports - commodities

natural gas, wood products, pulses, beans, fish, rice, clothing, jade and gems

Exports - partners

Thailand 52.6%, India 12%, China 9.2%, Japan 4.4% (2008)

Imports

$3.427 billion (2008 est.)
$2.964 billion (2007 est.)
note: import figures are grossly underestimated due to the value of consumer goods, diesel fuel, and other products smuggled in from Thailand, China, Malaysia, and India

Imports - commodities

fabric, petroleum products, fertilizer, plastics, machinery, transport equipment; cement, construction materials, crude oil; food products, edible oil

Imports - partners

China 32%, Thailand 21%, Singapore 20.5%, South Korea 5.3%, Malaysia 4.2%, Indonesia 4% (2008)

Reserves of foreign exchange and gold

$3.412 billion (31 December 2008 est.)
$2.312 billion (31 December 2007 est.)

Debt - external

$7.74 billion (31 December 2008 est.)
$7.022 billion (31 December 2007 est.)

Market value of publicly traded shares

$NA

Economic aid - recipient

$144.7 million (2005 est.)

Currency (code)

kyat (MMK)

Currency (code)

MMK

Exchange rates

kyats (MMK) per US dollar - 1,205 (2008 est.), 1,296 (2007), 1,280 (2006), 5.761 (2005), 5.7459 (2004)
note: unofficial exchange rates ranged in 2004 from 815 kyat/US dollar to nearly 970 kyat/US dollar, and by yearend 2005, the unofficial exchange rate was 1,075 kyat/US dollar; data shown for 2003-05 are official exchange rates

Fiscal year

1 April - 31 March