Information about Asia and the Pacific Asia y el Pacífico
Journal Issue

Myanmar: Staff Report for the 2011 Article IV Consultation—Informational Annex

International Monetary Fund
Published Date:
May 2012
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Information about Asia and the Pacific Asia y el Pacífico
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Latest Single YearSame Region/Income Group 1/
1975–801985–901997–2009East Asia and PacificLow Income
Total population, midyear (millions)33.640.857.51944846
Growth rate (percent annual average)2.31.592.20.72.2
Urban population (percent of population)24.024.933.244.128.3
Total fertility rate (births per woman)
Consumer price index (2005=100)114208126141
Food price index (2005=100)191
Social indicators
Public expenditure
Health (percent of GDP)
Education (percent of GDP)
Social security and welfare (percent of GDP0.1
Access to safe water
(Percent of population)
Access to health care
Population per physician (persons)12,7552,7788555,464
Immunization (percent under 12 months)
Child malnutrition (percent under 5 years)30928
Life expectancy at birth (years)
Infant (per thousand live births)9484542176
Under 5 (per thousand live births)1351187126118
Adult (15–59)
Male (per 1,000 population)384250158312
Female (per 1,000 population)31318899275
Sources: World Development Indicators, World Bank; and Myanmar authorities.

Latest single year.

Sources: World Development Indicators, World Bank; and Myanmar authorities.

Latest single year.


(As of January 31, 2012)

Membership Status

Joined on January 3, 1952; Article XIV.

General Resources Account

SDR MillionPercent Quota
Fund holdings of currency258.40100.00
Reserve position0.000.00

SDR Department

SDR MillionPercent Allocation
Net cumulative allocation245.76100.00

Outstanding Purchases and Loans:


Latest Financial Arrangements


Projected Payments to the Fund

In millions of SDRs (based on existing use of resources and present holdings of SDRs)


Implementation of HIPC Initiative:

Not Applicable

Implementation of Multilateral Debt Relief Initiative Assistance:

Not Applicable

Exchange Rate Arrangement

The kyat has been pegged to the SDR at K 8.5057 per SDR since May 2, 1977. Myanmar applies margins of 2 percent in respect of spot exchange transactions. In February 1993, the Central Bank of Myanmar (CBM) started issuing foreign exchange certificates (FEC) at a rate of 1 FEC=US$1. In December 1995, the authorities established FEC exchange centers where the FEC could be traded at K 450 per FEC, but also allowed the FEC to be traded in parallel markets. The FEC counters were closed in April 2010, and in September 2011, FEC transactions close to market rates were allowed at the recently allowed retail counters at the Thein Phyu center.

Myanmar continues to avail itself of transitional arrangements under Article XIV, although it has eliminated all Article XIV restrictions. Myanmar maintains exchange restrictions and multiple currency practices subject to Fund approval under Article VIII. Exchange restrictions subject to Fund jurisdiction arise from (i) advance import deposit requirements; (ii) 100 percent margin requirements; (iii) general restrictions on the availability and use of foreign exchange as such; (iv) general restrictions on the making of payments and transfers related to invisibles; (v) the extra burden caused by official action imposing additional costs for exchange transactions; (vi) official action that gives rise to multiple effective exchange rates in the markets (as well as potential deviations absent a mechanism to prevent spreads) with respect to the official exchange rate as compared to all other exchange rates, the FEC rate, and the “Thein Phyu counter rate”; and (vii) broken cross rates. The exchange rate regime is classified as other managed arrangement.

Article IV Consultation

Myanmar is on the standard 12-month Article IV consultation circle. The last Article IV consultation discussions were conducted on January 12–26, 2011 in Yangon and Nay Pyi Taw. The Executive Board approved the staff report of the 2010 Article IV consultation on March 16, 2011 on lapse-of-time basis.

Technical Assistance

Previously the Fund’s technical assistance to Myanmar was limited partly due to lack of ownership and poor implementation of past advice. Starting in FY 2011/12, technical assistance is prioritized to focus on the authorities’ plans to unify the exchange rate and lift exchange restrictions toward accepting their Article VIII obligations, Sections 2(a), 3, and 4. Following an Article VIII mission in October 2011, an MCM technical assistance (TA) mission was conducted in January 2012 on foreign exchange and monetary operations. Two missions are scheduled to provide TA on (i) central bank organization and drafting of a new central bank law; and (ii) drafting a new foreign exchange law.

Resident Representative



(January 2012)

The Fund and the Bank country teams for Myanmar, led by Ms. Karasulu (IMF) and by Ms. Dixon (World Bank), maintain excellent working relations and dialogue on macroeconomic and structural issues.

The level of cooperation and coordination is excellent but limited, given the relatively limited activities of both institutions in Myanmar, especially the World Bank (WB). Myanmar is in arrears to the WB, which limits the WB’s level of engagement in the country. The WB selectively provides support to donors in implementing activities including during the IMF’s annual Article IV consultations. The staff routinely shares country documents prepared by the respective institutions for their respective Executive Boards.

Recent key areas of cooperation and coordination include:

• Macroeconomic policy advice to the authorities. Representatives from the WB participate as active members of the team in every IMF Article IV mission to Myanmar. In this context, staffs from both institutions discuss macroeconomic policies and the main messages to the authorities.

• Structural reforms. Fund and WB teams have worked together and have shared views on a range of other issues, including structural reforms for a better investment climate and private sector development, and social development. World Bank staff actively contribute to the work of IMF Article IV missions through notes on important structural issues that are incorporated in the IMF staff reports.

Based on the above partnership, the WB and the Fund share a common view about Myanmar’s macroeconomic and structural reform priorities. Important reform priorities include:

• Unifying the exchange rate. The authorities are preparing to adopt a managed float in FY2012/13, as an initial step in the process toward exchange rate unification. Staff has urged the authorities to continue liberalizing the trade regime, which is a key component of the exchange rate unification process, and prepare a plan to gradually lift all remaining restrictions on current international payments and transfers by a target date.

• Promoting long-term growth and diversification. Modernizing Myanmar’s economy will require removing impediments to growth by enhancing business and investment climate, encouraging financial sector development, and further liberalizing trade and foreign direct investment (FDI). The new government’s recent efforts go in the right direction and would benefit from coordination across government agencies, broader consultation with stakeholders, and using best international practices distilled from other countries’ experiences through substantial capacity building efforts.

• Monetary policy and deficit financing. The recent adjustments of the fixed interest rate structure have appropriately placed deposit rates below Treasury bond rates, helping reduce projected deficit monetization. Pending the introduction of treasury bond auctions to fully bond finance the deficit, expanding retail sales of treasury bonds, and lifting restrictions on state banks’ and insurance companies’ bond holding would be essential to reduce deficit monetization.

• Further liberalization of financial intermediation and strengthening regulatory and supervisory framework. Allowing the expansion of private bank branch networks and further expanding the list of collateral are welcome steps that have improved access to credit. However, expediting the removal of administrative controls on financial intermediation remains essential to facilitate growth. Liberalization of the financial sector should be complemented with a stronger regulatory and supervisory framework to maintain financial stability.

• Fiscal discipline and transparency. Prudent fiscal policy is essential to maintain macroeconomic stability, especially during the transition to a unified exchange rate. Staff emphasizes an urgent need to improve the quality, timeliness, and transparency of government financial statistics, including those of the state economic enterprises (SEEs). Strengthening pubic financial management, including by establishing a treasury function, and defining institutional arrangements to delineate fiscal responsibilities under planned decentralization, are essential to safeguard financial discipline.

• Prioritizing fiscal policies toward social and infrastructure spending. Staff welcomes the authorities’ plans to shift some spending to health and education in the first budget of the new government, but sees further room to reorient spending to social spending.

The teams are committed to continue their close cooperation going forward. The table below details the specific activities planned by the two country teams over the period February 2012–January 2013.

Myanmar: Joint Managerial Action Plan February 2012–January 2013
TitleProductsProvisional and Actual Timing of MissionsExpected and Actual Delivery Date
Mutual Information on Relevant Work Programs
The World Bank’s work program in the next 12 monthsSupport to donors
• Participation in IMF Article IV consultationsDuring the Article IV consultationsOngoing
• Support to multi-donor Livelihoods and Food Security Trust FundOngoingOngoing
• Support to multi-country Avian Influenza projectOngoingOngoing
The Fund’s work program in the next 12 monthsMacroeconomic policy analysis and advice
• Staff visitMid-2012
• Article IV consultationLate-2012
Technical assistance
• Financial sector Ongoing work on financial sector modernizationMainly during the Article IV consultationsOngoing
• Exchange rate unification and Article VIII issuesArticle VIII and TA missionsOngoing
• Monetary and financial statistics Ongoing work on improving the accounting of the monetary and banking statisticsMainly during the Article IV consultationOngoing


(January 2012)

Myanmar became a member of the World Bank in 1952, IFC in 1956, and IDA in 1962. During the period 1956–61, the Bank made three loans totaling US$33.3 million in the transport sector. No lending was requested during 1962–73. Lending resumed in 1973 and over the period 1973–87, 30 IDA credits totaling some US$804 million equivalent were committed, of which US$752.8 million equivalent was disbursed. New lending ceased after 1987 due to a lack of dialogue on policy reform. The last formal Consultative Group meeting was held in January 1986 in Tokyo, chaired by the Bank. Since then, there have been occasional contacts between the government and the Bank on the sidelines of the Annual Meetings.

Myanmar went into arrears with the Bank in January 1998 and has been in nonaccrual status since September 1998. As of January 2012, Myanmar’s obligation to IDA was US$782.8 million, of which US$391 million was in arrears.

The Bank’s engagement in past years has been limited to monitoring economic and social developments in the country based on available information and reports, liaising with other international donors and agencies, continued participation in IMF Article IV missions, and providing support to the work of other donors in selected areas. As part of its monitoring and updating of information, the Bank has continued to participate in IMF Article IV missions. Support to partners has included an avian influenza project implemented by FAO, and the provision of technical expertise to ASEAN following Cyclone Nargis in 2008 for damage assessment and recovery planning. Following on this work, the Bank has provided technical support for impact monitoring to the multi-donor livelihoods trust fund (LIFT). The Bank expects to expand its support to donors in Myanmar through further analytical work in the coming months.


(February 2012)

Myanmar joined the Asian Development Bank (AsDB) in 1973 and operations started the same year. The AsDB has so far provided 32 loans totaling US$530.9 million for 28 projects. Of these, two loans amounting to US$6.6 million were from the AsDB’s ordinary capital resources (OCR), and 30 loans amounting to US$524.3 million were from its special funds resources. All of the loans to Myanmar have been closed. The AsDB has so far provided technical assistance (TA) totaling US$10.7 million for 38 projects. Of these 38 TA projects, 28 were project preparatory and 10 were advisory.

The last loan and TA projects for Myanmar were approved in 1986 and 1987, respectively. However, Myanmar is a participating member of the AsDB-assisted Program of Economic Cooperation in the Greater Mekong Subregion (GMS Program). In that capacity, Myanmar participates in regional meetings and workshops. The AsDB, along with the World Bank, facilitated damage assessment following Cyclone Nargis in 2008. Close coordination is being maintained with the IMF, the World Bank, and the UNDP with particular emphasis being given to assessment of the government’s economic reform program and recommended policy actions. Liaison is being maintained with Myanmar’s major bilateral donors regarding the status of their assistance program. As of February 9, 2012, Myanmar’s total overdue loan service payments in respect of the AsDB’s Asian Development Fund (ADF) loans were equivalent to US$493.3million. Myanmar repaid on December 18, 2003 its OCR due to the AsDB amounting to EUR 1,225,200 and accordingly cleared its arrears under OCR loans. To date, Myanmar has not provided any indication of its intention to clear the overdue loan service payments under 28 ADF loans. Myanmar has subscribed to additional shares of AsDB’s fifth general capital increase. Each AsDB member is entitled to a 200 percent increase in its allocated shares. Myanmar’s additional subscription became effective on August 12, 2010 and its share of total subscribed capital is 0.545 percent as of February 9, 2012.

The majority of AsDB assistance has been provided for the development of the agricultural sector. Assistance in sectors other than agriculture stemmed from an attempt to achieve sectoral balance in lending. The cumulative amount of AsDB lending to Myanmar remains unchanged as shown below:

Myanmar: Asian Development Lending
SectorLoans (Number)Loans (US$ million)Percent
Agriculture and natural resources14296.155.8
Health, nutrition, and social protection263.111.9
Industry and trade546.48.7
Transport and communications242.58.0
Water supply, sanitation, and waste management436.06.8
Sources: Fact Sheet: Myanmar and AsDB. Available at
Sources: Fact Sheet: Myanmar and AsDB. Available at


Assessment of Data Adequacy for Surveillance

General. Data provision continues to have serious shortcomings that hamper effective surveillance even though a number of indicators are now disseminated on the internet. Data are not provided in a timely manner, while official and independent estimates of key macroeconomic variables differ widely.

National accounts. National accounts statistics are available only on an annual basis with considerable delay. Coverage of the private sector is incomplete as a proper business directory for sampling is not available yet. Resource constraints, primarily at the Planning Department and the Central Statistical Organization limit the conduct of surveys. GDP estimates do not completely account for informal sector activity. Agricultural work-in-progress is not included; construction is recorded on the basis of construction permits; and taxes and subsidies on products are excluded. Estimates of goods for processing and deflators of financial and insurance services need improvement. However, progress has been made in updating the base year to FY 2005/06 and surveys are being conducted on agricultural costs, manufacturing, and the informal sector, including a plan to include data from the Chamber of Commerce’s survey on private sector in GDP estimation starting April 2012.

Price statistics. The base, basket, and weights of the CPI were updated following previous STA TA and derived from the Household Income and Expenditure Survey of 2006. Weaknesses remain as weights only represent urban households even though rural areas were also surveyed; some construction inputs are included; rentals of owner-occupied housing are excluded; missing prices are not imputed; and the classification of items is outdated.

Government finance statistics. There is no comprehensive monthly or quarterly compilation of fiscal data. Annual comprehensive data are compiled with delays of up to 12 months after the end of the reference year. In addition, only consolidated data for state economic enterprises are available, and some transactions are recorded partly on an accrual basis and partly on a cash basis. Fiscal and monetary data are not consistent. Budget estimates and actual expenditures tend to differ by wide margins. Annual data on the operations of the consolidated central government were last reported for 2005 to STA for publication in the Government Finance Statistics Yearbook, but do not include an economic classification of expenditure. In addition, recording of debt statistics are not comprehensive.

Monetary and financial statistics. The monetary survey compiled by the CBM covers the central bank and all commercial banks (public and private). Reporting of monetary data in the Standardized Report Forms, which accord with the MFSM classification principles, was established in January 2012. The quality of monetary statistics could be improved by: (i) using the market exchange rate, rather than the overvalued official exchange rate, for valuing foreign currency-denominated balance sheet accounts; (ii) monitoring the consistency of interbank accounts that show positions between the CBM and the commercial banks; and (iii) using electronic means to capture and share data to minimize mistakes. In January 2012, the CBM authorities were recommended that (i) on the date of adopting a managed float (and also for that end-month), the CBM and all commercial banks should prepare their balance sheets using the previously in effect exchange rate and the new exchange rate prevailing on the date of unification (and at that end-month); (ii) amounts contra to the revaluation of foreign currency denominated positions (at the CBM and all commercial banks) should be posted to the valuation adjustment account rather than to the profit and loss account; (iii) in due course, adopt market or fair value-based valuation of financial instruments; and (iv) review the accuracy of recording the IMF Accounts in the CBM’s balance sheet for consistency with FIN recommendations and make revisions as called for.

External sector statistics. The coverage and reliability of the balance of payments could be improved. Merchandise imports are underestimated as military imports and other official imports, including imports linked to FDI under joint venture agreements with exemptions from custom duties, are generally excluded, and an overvalued official exchange rate is still used to convert some private sector transactions. Detailed data on services transactions and financial flows are generally not available and transactions that are not undertaken through the official banking system are usually not estimated. Evaluation of external debts, which are not nominated in U.S. dollars, is conducted irregularly; historical data are distorted by applying the exchange rate at the evaluation point. Trade data are recorded at the time of entries by customs, causing serious volatility in values and incorrect time records. Many of the recommendations of the STA TA missions conducted in 1999 and 2000 have not been implemented.

Data Standards and Quality

Myanmar does not participate in the IMF’s General Data Dissemination System. No data ROSC available.

Reporting to STA (optional)

Myanmar submits data reports to STA with a lag of two to six months. However, balance of payments statistics have not been reported to STA for publication since 2007.

Myanmar: Table of Common Indicators Required for Surveillance(As of January 2012)
Date of latest ObservationDate ReceivedFrequency of Data1Frequency of Reporting1Frequency of Publication1
Exchange Rates12/1101/12MIM
International Reserve Assets and Reserve Liabilities of the Monetary Authorities207/1111/11MII
Reserve/Base Money09/1101/12MIM
Broad Money09/1101/12MIM
Central Bank Balance Sheet09/1101/12MIM
Consolidated Balance Sheet of the Banking System09/1101/12MIM
Interest Rates301/1201/12MIM
Consumer Price Index10/1101/12MMM
Revenue, Expenditure, Balance and Composition of Financing4 - General Government5FY 10/1101/12AINA
Revenue, Expenditure, Balance and Composition of Financing4 - Central GovernmentFY 10/1101/12AINA
Stocks of Central Government and Central Government - Guaranteed Debt6FY 10/1101/12AINA
External Current Account BalanceFY 10/1101/12AII
Exports and Imports of GoodsFY 10/1101/12MMM
GDP/GNPFY 10/1101/12AII
Gross External DebtFY 10/1101/12AII
International Investment Position7Q1 200708/08QII

Daily (D), Weekly (W), Monthly (M), Quarterly (Q), Annually (A); Irregular (I); Not Available (NA).

Any reserve assets that are pledged or otherwise encumbered should be specified separately. Also, data should comprise short-term liabilities linked to a foreign currency but settled by other means as well as the notional values of financial derivatives to pay and to receive foreign currency, including those linked to a foreign currency but settled by other means.

Officially determined, including discount rates, money market rates, rates on treasury bills, notes, and bonds.

Foreign, domestic bank, and domestic nonbank financing.

The general government consists of the central government (budgetary funds, extrabudgetary funds, and social security funds) and state and local governments.

Including currency and maturity composition.

Includes external gross financial asset and liability positions vis-à-vis nonresidents.

Daily (D), Weekly (W), Monthly (M), Quarterly (Q), Annually (A); Irregular (I); Not Available (NA).

Any reserve assets that are pledged or otherwise encumbered should be specified separately. Also, data should comprise short-term liabilities linked to a foreign currency but settled by other means as well as the notional values of financial derivatives to pay and to receive foreign currency, including those linked to a foreign currency but settled by other means.

Officially determined, including discount rates, money market rates, rates on treasury bills, notes, and bonds.

Foreign, domestic bank, and domestic nonbank financing.

The general government consists of the central government (budgetary funds, extrabudgetary funds, and social security funds) and state and local governments.

Including currency and maturity composition.

Includes external gross financial asset and liability positions vis-à-vis nonresidents.

1Prepared by the World Bank Group’s staff.
1Prepared by the Asian Development Bank’s staff

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