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>Myanmar's Political Upheaval Threatens Medium-Term Outlook For Multiple Sectors, Infrastructure, Garment Among Most At Risk
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Myanmar's Political Upheaval Threatens Medium-Term Outlook For Multiple Sectors, Infrastructure, Garment Among Most At Risk
1. We at Fitch Solutions believe Myanmar's economic prospects have weakened, and we have revised down our FY2020/21 and FY2021/22 GDP growth forecasts, expecting muted growth. We have also revised down our Short-Term Political Risk Index score. 2. Although we are yet to make any revisions to our individual sectors' forecasts, the political turmoil poses elevated risks to all industries. 3. Prospects for foreign investment have weakened significantly, and there is now a high likelihood of delays and even cancellations of infrastructure, power and oil & gas projects. 4. We had previously highlighted Myanmar as a beneficiary of the acceleration in textile manufacturing supply chain shifts away from China, but the current events could be a catalyst for many garment manufacturers relocating to more politically stable countries. 5. Foreign investors from the US, Europe and Asia (excluding China) - the largest investors in Myanmar - will most likely adopt a more cautious approach towards the country, while Chinese investors could be less impacted as they maintain a higher tolerance for risk and potentially benefit from closer ties between the military government and Chinese authorities. 6. The possibility of international sanctions on Myanmar would further deteriorate the country's economic outlook.
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