Myanmar's population has reached 54.1 million as of April 1, growing by 1.32 percent from 2017, Xinhua reported. According to a statement released by the country's Ministry of Labour, Immigration and Population, of the total estimated population, based on the 2014 census of population and households by the ministry, 28.152 million are female. The Yangon region topped the list with 8.203 million, followed by Mandalay region with 6.477 million, Shan state with 6.33 million and Ayeyawaddy region with 6.27 million.
(Source: Mizzima, April 8, 2019)
Within this growing population lies a rising number of lower-middle to middle income consumers willing to increase expenditure on consumer goods. In a 2017 Deloitte consumer survey conducted in the cities of Yangon and Mandalay, more than half of the respondents intended to increase their expenditure by at least 10% for the year ahead. Colliers thinks that these consumers, accounting for the largest share in Myanmar, have the potential to become a very profitable segment. In fact, the middle class consumers are projected by The Boston Consulting Group to double in size in the 2021. The manifestation of this continuous rise is likely to fuel growth across the full range of consumer products and retail categories in the country.
Five foreign companies have been granted provisional licences to issue life insurance policies through subsidiaries following more than two years of delay in opening up the Myanmar market. British Prudential, Japanese Dai-ichi Life, Hong Kong AIA, US Chubb and Canadian Manulife have been authorised to establish wholly-owned life insurance subsidiaries. The Ministry of Planning and Finance on April 5 published the list of foreign insurers as "preferred applicants" to operate as a life insurance company through a 100% wholly-owned subsidiary. The announcement was originally scheduled for release on March 29. A day after The Myanmar Times on January 1 broke news that Samsung Life Insurance had closed its Myanmar office, the government announced they would grant up to three licences to foreign companies to offer life insurance as wholly-owned foreign insurers. Foreign investors have expressed frustration with multiple delays in the long promised liberalisation of Myanmar’s almost entirely closed insurance market.
(Source: The Myanmar Times, April 8, 2019)
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While the notification remains relatively new, we can expect both multinational and local insurers to add their spot to the Yangon office landscape. The insurance providers, especially the foreign firms, will most likely see significant expansion of staffing. We predict that the main offices of most of these companies will remain focused on downtown as this remains to be Yangon’s key business district. Foreign firms are most likely to choose Grade A or Grade B quality office space which will be for mostly managerial, underwriting and administration staff. Above all else, Colliers believes that space requirements are set to rise in the coming years as the government endeavours to roll out more policies and reforms targeted to the liberalisation of other fundamental sectors.
Newin Sinsiri, the ADB’s country director for Myanmar, told a recent press conference that the country could enjoy 6.6% growth in gross domestic product growth this year and 6.8% next year. “We remain positive about this economy, as Myanmar opens up its retail and wholesale sectors and continues to modernise corporate governance and management,” he said after the release of the Asian Development Outlook report for this year. Newin expects the country’s growth to be steady in the next few years if the government accelerates the wide range of economic reforms initiated since 2011. He stressed the importance of improvements in both hard and soft infrastructure. “In order to make agriculture more productive, we need to have good infrastructure in place, and to know how to integrate into the value chain. We need to look at the bigger picture,” he said. “We need to bring the market close to the production. Better roads and railways as well as reliable 24-hour electricity are critical. When it comes to soft infrastructure, the most important is human capital. We are looking at how we can help the government with technical know-how in its efforts for Industry 4.0.”
(Source: Eleven Myanmar Times, April 8, 2019)
Myanmar's economic growth is expected to gain its momentum in the next three years. As Colliers views it, the growth is most likely to be driven by a pick-up in foreign and domestic investments in light of the recent policy measures such as opening of retail and wholesale sectors, liberalization of services sector and loosening restrictions on foreign bank lending. Foreign bank entry is expected to have a positive impact on access to credit, particularly for construction and trade. Construction activity is also expected to accelerate in response to the Belt and Road Initiative related project activities, coupled with new memorandums of understanding signed for the development of the Kyaukphyu deep-sea port and the Muse-Mandalay railway line. Additionally, large investments may also accelerate from Japanese investments in shipping, electricity infrastructure and rail modernization. According to the World Bank, the growth will be fueled by an increase in government spending, with one to two percent increase projected in the fiscal deficit, in the lead up to the 2020 elections. In the baseline scenario, export growth will gradually accelerate in response to kyat devaluation, helping export competitiveness.