The transition between the USDP-dominated former government and the NLD-dominated one has gone as well as could have possibly been expected so far, with the latter group having taken their places in Myanmar's parliament on February 1. However, significant questions still remain as to the identity of the NLD's presidential nominee, as leader Aung San Suu Kyi remains barred from the role by constitutional article 59(f). At the time of writing, Suu Kyi's chances at the role appear to be very minimal, with wide-ranging reports indicating that negotiations between the two parties on the subject have not been successful. Instead, the NLD is likely to elect a loyalist candidate who will be heavily influenced by Suu Kyi, in line with our long-held core view. Despite what may be seen as somewhat of a setback for the NLD, the party still holds a massive majority in parliament, and can legislate somewhat effectively on its own accord. However, the former opposition party will not be able to amend the constitution without the consent of the Tatmadaw, meaning that the military retains significant powers that are not typical of a democracy.
We estimate real GDP growth to have come in at around 7.0% in 2015 marking the fifth consecutive year of plus-7.0% growth. We continue to warn of the risk associated with the ongoing slowdown in the global economy and the leverage-fuelled construction boom that has been in play over the past few years. We forecast 6.9% real GDP growth in 2016, compared with the IMF's forecast of 7.2%. The Cambodian government is looking to improve regulation in order to attract more investment into the country's casino industry. An expanded casino industry would help the Cambodian government achieve its goal of boosting Chinese tourist arrivals over the coming years.
Despite external headwinds, we maintain our bullish outlook on the long-term growth prospects of the Laotian economy, and expect real GDP to continue growing at an average pace of 6.5% per annum over the coming decade. Following an estimated real GDP growth rate of 7.4% in 2015, Laos' economic growth is likely to moderate to 7.0% in 2016, but will remain a regional outperformer. That said, the poor business environment could hamper a diversification of the country's economic base, economy into manufacturing, posing downside risk to its long-term economic growth prospects.
Although there was a significant change of leadership for the Lao People's Revolutionary Party (LPRP) during its 10th party congress (held from January 18-22), we believe that the new politburo is unlikely to make dramatic changes to existing policies that would risk disrupting the rapid economic development that has marked recent years. However, Vientiane will likely adopt a more balanced foreign policy stance over the coming year given that the country is set to chair the ASEAN Committee for 2016, and the new leadership appears to be more balanced.
Assess your risk exposure in Cambodia, Laos, Myanmar with our 100% independent forecasts assessing the pace and stability of this key market. Backed by trusted data from BMI Research's 52 million data point economic forecast model, this report will allow you to measure political, economic, business environment and operational risks in Cambodia, Laos, Myanmar with confidence.
Your subscription service includes:
- Delivery of the report in print and PDF
- Online access for 12 months
- The functionality to translate your online report into your choice of 10 languages - Arabic, Chinese, French, German, Italian, Japanese, Korean, Portuguese, Russian and Spanish
- The ability to export data and graphs from the online report directly into your workflow
- The support of a dedicated Account Manager to answer any questions you might have about your subscription
- Access to our team of leading analysts who will be happy to answer any questions you might have about the data and forecasts included in this report