Myanmar's economy is slowly pickingup speed and regaining stability after a volatile 2018.Despite a challenging global environment, Myanmar'seconomic growth is expected to rise to 6.5 percent in2018/19 from 6.4 percent in the Transition Period1 supportedby strong performance in the manufacturing and servicessectors. Volatility that buffeted the economy in 2018 hasstarted to ease. Inflation moderated, the kyat stabilized,and fuel prices fell in Q1 2018/19, though there have beensome reversals in prices in Q2. The economic outlook lookspositive, with growth expected to reach 6.7 percent in themedium-term. The recent decisions to ease traderestrictions; open the financial sector to greater foreigncompetition; and begin mega infrastructure projects signal adecisive and awaited uptick in reform momentum. Downsiderisks to the economic outlook are driven by externalfactors, including possible revocation of preferential tradeaccess under the European Union Generalized System ofPreferences. Slowing global and regional growth, especiallyin China, together with renewed escalation of global tradetensions, could also slow exports and the flow of inboundforeign investments. Insecurity in border areas, the Rakhinecrisis, with violence and forced displacement of refugees,and the recent flare-up in violence involving the ArakanArmy, could affect investors' sentiment. The 2020general election is also a source of uncertainty.
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