Burma Economy Profile 2008

Economy - overview

Burma, a resource-rich country, suffers from pervasive government controls, inefficient economic policies, and rural poverty. The junta took steps in the early 1990s to liberalize the economy after decades of failure under the "Burmese Way to Socialism," but those efforts stalled, and some of the liberalization measures were rescinded. Despite Burma's increasing oil and gas revenue, socio-economic conditions have deteriorated due to the regime's mismanagement of the economy. Lacking monetary or fiscal stability, 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 attracting outside investment slowing the inflow of foreign exchange. The most productive sectors will continue to be in extractive industries, especially oil and gas, mining, and timber with the latter especially causing 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 the country's 20 private banks and disrupted the economy. As of 2007, the largest private banks operated under tight restrictions limiting the private sector's access to formal credit. Moreover, the September 2007 crackdown on prodemocracy demonstrators, including thousands of monks, further 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. 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)

$91.13 billion (2007 est.)

GDP (official exchange rate)

$13.7 billion (2007 est.)

GDP - real growth rate

5.5% (2007 est.)

GDP - per capita (PPP)

$1,900 (2007 est.)

GDP - composition by sector

agriculture: 53.9%
industry: 10.6%
services: 35.5% (2007 est.)

Population below poverty line

32.7% (2007 est.)

Household income or consumption by percentage share

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

Inflation rate (consumer prices)

39.5% (2007 est.)

Investment (gross fixed)

12.2% of GDP (2007 est.)

Labor force

29.26 million (2007 est.)

Labor force - by occupation

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

Unemployment rate

5.2% (2007 est.)

Budget

revenues: NA
expenditures: NA (2006 est.)

Industries

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

Industrial production growth rate

3.9% (2007 est.)

Electricity - production

6.154 billion kWh (FY06)

Electricity - consumption

3.744 billion kWh (FY06)

Electricity - exports

0 kWh (2005)

Electricity - imports

0 kWh (2005)

Oil - production

7,700 bbl/day (2006 est.)

Oil - consumption

20,460 bbl/day (2006 est.)

Oil - imports

19,180 bbl/day (2004 est.)

Oil - exports

5,000 bbl/day (2006 est.)

Oil - proved reserves

1.963 billion bbl (2007 est.)

Natural gas - production

12.47 billion cu m (2005 est.)

Natural gas - consumption

3.971 billion cu m (2005 est.)

Natural gas - exports

8.497 billion cu m (2005 est.)

Natural gas - imports

0 cu m (2005)

Natural gas - proved reserves

271.6 billion cu m (1 January 2006 est.)

Current Account Balance

$1.676 billion (2007 est.)

Agriculture - products

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

Exports

$6.6 billion f.o.b.
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 (2007 est.)

Exports - commodities

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

Exports - partners

Thailand 48.8%, India 12.7%, China 5.2%, Japan 5.2% (2006)

Imports

$2.642 billion f.o.b.
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 (2007 est.)

Imports - commodities

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

Imports - partners

China 35.1%, Thailand 22.1%, Singapore 16.4%, Malaysia 4.8% (2006)

Reserves of foreign exchange and gold

$1.762 billion (31 December 2007 est.)

Debt - external

$6.914 billion (31 December 2007 est.)

Market value of publicly traded shares

$NA

Economic aid - recipient

$144.7 million (2005 est.)

Currency (code)

kyat (MMK)

Exchange rates

kyats per US dollar - 1,296 (2007), 1,280 (2006), 5.761 (2005), 5.7459 (2004), 6.0764 (2003)
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