Economic Things have gotten tougher with growth slowing and foreign direct investments (FDI) down for the second consecutive year. Inflation in Myanmar is currently around 4.5pc. That is down from 6.8pc in 2016 and 10pc in 2015. Inflation has a history of being high. Deposit rates must be higher than inflation to attract savings. This is Myanmar’s main concern.
Why is inflation high in Myanmar? The main reason is the CBM printing more money to finance government borrowing, which jacks up inflation. Myanmar has always had a high budget deficit, which is why it has high inflation. It is very difficult to reduce the deficit because Myanmar has many needs. As such, the budget deficit will continue in the foreseeable future.