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- GDP (PPP):
- $242.0 billion
- 7.7% growth
- 6.9% 5-year compound annual growth
- $4,706 per capita
- Inflation (CPI):
- FDI Inflow:
Several changes in Burma’s economic environment have improved economic freedom in recent years. Economic sanctions have been eased or lifted. A new foreign investment law would permit full foreign ownership of firms and ease restrictions on land leases, although its implementation has been delayed. In 2015, three foreign banks opened branches for the first time in decades.
Economic Freedom Snapshot
- 2016 Economic Freedom Score: 48.7 (up 1.8 points)
- Economic Freedom Status: Repressed
- Global Ranking: 158th
- Regional Ranking: 36th in the Asia–Pacific Region
- Notable Successes: Trade Freedom and Fiscal Freedom
- Concerns: Property Rights, Corruption, and Business Freedom
- Overall Score Change Since 2012: +10
Burma still performs very poorly in many areas. Long-standing problems include poor public finance management and underdeveloped legal and regulatory frameworks. Weak enforcement of property rights and fragile rule of law have driven many people into the informal sector. The inefficient public sector remains the largest source of employment.
Burma’s slow transition from military dictatorship continues. Beginning in 2010, it experimented with some political and economic reform, including releases of political prisoners, relaxation of media censorship, and exchange rate reform. National League for Democracy (NLD) leader and Nobel laureate Aung San Suu Kyi was released from jail in November 2010 and won a seat in parliament in 2012. In November 2015, the NLD swept the general election. However, the army remains a major political force. The United States and the European Union have eased some sanctions in response to limited changes, but sectarian violence and persecution of Muslims and Christians has continued. Heavy government intervention in the economy has made Burma one of the world’s poorest countries.
Corruption, tax evasion, and nepotism are rampant, and the government has not taken any significant steps to curb them. In theory, Burma has a legal system that protects and facilitates the acquisition and disposition of real property, but such judicial decisions can often be influenced by government interference, personal relationships, or bribes. The result is a judicial process that is perceived as far from impartial and fair.
The top individual income tax rate is 20 percent, and the top corporate tax rate is 30 percent. Other taxes include commercial and capital gains taxes. Overall tax revenue equals 6.1 percent of GDP, although income tax revenue has been rising in recent years. Government spending amounts to 28.7 percent of total domestic output, but deficits have stabilized. Public debt corresponds to around 17 percent of GDP.
The regulatory environment is hampered by a lack of legal transparency, and much business activity is concentrated in state-owned enterprises. Inefficiencies in the labor market contribute to chronic unemployment and underemployment. In 2015, the government took initial steps to privatize the electricity generation utility that serves Rangoon.
Burma’s average tariff rate is 2.9 percent, and some imports face additional restrictions. Exports are subject to a 2 percent tax. The government screens new foreign investment. Numerous state-owned enterprises distort the economy. Banking is dominated by state-owned banks, although several private banks have been in operation. Most loans are directed to state-led projects, and access to credit remains poor.