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IMF projects muted growth for 2021 economy

Myanmar’s economy is expected to post muted growth this year due to the impact of COVID-19, but should rebound next year, the IMF said. In a statement, IMF projected this year’s growth to slow down to 0.5 percent, from a projected 3.2pc last year. The economic fallout will be felt by lower income groups, SMEs and those in conflict regions.

The economy is expected to recover next year, when it is projected to grow 7.9pc on strong base effects, IMF added, though it also said it expects poverty to go up. At the same time, permanent losses in medium-term output are expected, raising concerns of increased poverty. The IMF’s growth forecast is more pessimistic than that of the Asian Development Bank, which earlier this year projected Myanmar’s growth to have slowed to 1.8 pct in the fiscal year ending September 2020.

ADB expected the economy to bounce back to 6 pct this year. The IMF, in the statement, also announced that its executive board has approved the release of financial assistance amounting to SDR 258.4 million (US$372 million) to help Myanmar minimise the economic and social impacts of the pandemic. The IMF assistance will aid Myanmar’s COVID-19 policy measures aimed at minimising the pandemic’s economic and social impact while supporting the vulnerable.

Source: Myanmar Times

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Myanmar Trade Centre to open in Singapore

Myantrade has plans to open a Myanmar Trade Centre in Singapore in the near future to provide support for the country’s agricultural exports. Secretary of the Myanmar Fruit, Flower and Vegetable Producer and Exporter Association said the trade centre- which will be monitored closely by the Myanmar Embassy to Singapore – can help Myanmar expand its farming exports to the city-state. According to the Secretary, Singapore is one of Myanmar’s trading partners.

Singapore imports fruits such as Sein Ta Lone (mangoes) and muskmelons from Myanmar. Delivery time from Myanmar to Singapore is just a week. Singapore’s population is small so Myanmar cannot sell a lot to them but their consumption and spending power is high. This creates a market for Myanmar. Myanmar can export any fruit. It is good if Myanmar products can penetrate the market. Singapore is located close to Myanmar, so allowing to export products that have a short shelf life.

So, Grapes from Yamethin can be exported to Singapore’s market. Trade between Myanmar and Singapore was valued at more than US $3,900 million in the 2019-2020 fiscal year, with Myanmar exports exceeding $700 million. Singapore, meanwhile, is one of Myanmar’s largest investors, accounting for 45.85 percent of the country’s total foreign investment. The city-state has invested in the urban development, real estate, and energy and production sectors of Myanmar.

Source: Myanmar Times

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CMP garment exports drop by 25 per cent in Q1

MYANMAR’S garment export has dropped by 25 per cent as of the first quarter of the current financial year 2020-2021 compared with a year-ago period on the back of a slump in demand by European Union market, the Ministry of Commerce stated. Exports of garments manufactured under the
cut-make-pack (CMP) system were valued US$870 million in the past three months (Oct-Dec) in the current FY, according to the Ministry of Commerce’s data. The figures plunged from $1.2 billion in the corresponding period of the last FY2019-2020. Myanmar ’s garment industry faces challenges such as raw material supply disruption and cancellation of orders, CMP garment exporters said. At present, over 100 CMP garment factories temporarily shut down on the reason for the lack of raw materials and slump in demand due to the coronavirus negative impacts, leaving thousands of workers unemployed.

Sixty-four factories have been permanently closed down during the pandemic, compensating about 25,000 workers. The data does not include those factories that have not resolved worker payments, stated the Ministry of Labour, Immigration and Population. The Myanmar Garment Manufacturers Association (MGMA) and EuroCham Myanmar held virtual meetings on 7 January 2021, along with representatives from EU brands. They highlighted efforts to increase job creations in the garment factories, keep garment factory order from European buyers, improve skilled workers’ capacity, and upgrade the Myanmar Garment Human Resource Development Centre (MGHRDC) and strengthen relationships between employers and workers. Additionally, MGMA also proposed leading a working group including government officials, European Brands’ representatives and the related institutions, to transform CMP into the free-on-board(FoB) system.

Myanmar mainly exports the garments to Japan and European countries, especially Germany. The US has also purchased the garments made in Myanmar. Some western countries cancelled orders amid the pandemic. According to the Ministry of Commerce data, exports of garments manufactured under the cut-make-pack (CMP) system were valued US$4.798 billion in the last financial year 2019-2020. The export value of CMP garments was only $850 million in the 2015-2016FY, but it has tripled over the past two FYs. In the 2016-2017FY, about $2 billion was earned from exports of CMP garments. The figure increased to an estimated $2.5 billion in the 2017-2018FY and $2.2 billion in the 2018 mini-budget period (from April to September). It tremendously grew to $4.6 billion in the 2018-2019FY, according to the Commerce Ministry.

Source: The Global New Light of Myanmar