Outlook for 2011-12

• Myanmar is set to undergo its most profound political shake-up in many years, but there will be no major changes in the balance of power in 2011-12, with the military regime remaining the dominant force.
• Freeing Myanmar's iconic pro-democracy leader, Aung San Suu Kyi, was a calculated risk on the part of the generals. There is still a possibility that they will struggle to contain popular support for change under her leadership.
• Despite Western condemnation of the recent national elections as deeply flawed, China, India and members of the Association of South-East Asian Nations (ASEAN) will be supportive of the new, post-election administration.
• Although there is a chance that technocrats could be appointed to important positions in a new cabinet, there is unlikely to be an immediate improvement in the quality of economic policymaking.
• Recent developments on the political front are not expected to have a major bearing on the economy. Economic growth will be driven by investment from Asia in the power and petroleum sectors and in infrastructure.
• Consumer price inflation slowed sharply in 2009 as a consequence of falling fuel and food prices, but it has since picked up, and will accelerate to an annual average of 12.4% in 2011-12.

Monthly review

• Since her release from house-arrest, Aung San Suu Kyi has sought to revitalise her party, the National League for Democracy, and to deepen ties with emerging pro-democracy groups.
• Aung San Suu Kyi has also met a number of international leaders in recent weeks in an effort to increase her party's influence.
• The military regime is currently taking a wait-and-see approach to its handling of the post-election activities of its opponents.
• During his visit to Myanmar in late November the UN special envoy to the country, Vijay Nambiar, urged the Election Commission to address concerns about electoral fraud "as transparently as possible".
• Despite recent growth in tax revenue, the rapid increase in the government's debt stock continued in August, indicating that the ruling military junta is continuing to run a large budget deficit.
• There have been some signs of improvement in the economy, with sales of electricity to industry rising sharply in August.
• Consumer price inflation slowed to 7.4% year on year in August, continuing the decelerating trend observed in recent months.