Monthly Business Brief, June 2024

Monthly Business Brief, June 2024

Economy

Myanmar’s economy continues to face significant challenges in 2024- World Bank June report

 According to Myanmar Economic Monitor, June 2024 of the World Bank Myanmar, economic activity has been constrained by elevated conflict, increased macroeconomic volatility, and a challenging business environment. World Bank assessed that ongoing impacts are on household livelihoods and agricultural production, conflict continues to disrupt land border trade with China and Thailand, as well as domestic supply chains. Since October 2023 more than one million people have been displaced by conflict, bringing the total number of internally displaced persons (IDPs) to 3.1 million. Kyat depreciation and lack of access to foreign currency and import licenses have led to persistent inflation and shortages of essential imported inputs. Electricity outages have worsened for households and industries. WB estimated Myanmar GDP growth by just 1 percent in the year 2023- 2024 in compare to official data of 3.5%.

Finance

Kyat depreciates to K 4,500 against US dollar and CBM interventions

 Kyat weakened to K 4,500 against US dollar at end June at the over the counter market.  The Central Bank of Myanmar (CBM) sold US$3 million and 40 mllion Thai baht only  in June. The CBM injected a total of  US$180 million, 32.7 million yuan, and 2.2 billion Thai baht for exporters and importers and market in the past six months (January-June) 2024, with a view to curbing the volatile exchange rate in the local forex market.

Trade

Customs tariff relief announced for SKD, CKD fuel vehicle imports with MIC are to be domestically assembled under the semi-knocked down system and entirely built up (completely knocked down) system with the permit of the Myanmar Investment Commission are eased Customs tariff. According to the Myanmar Customs Tariff 2022, the previous Customs duty for personal vehicles under 2000 CC was set at 30 per cent for completely build-up vehicles, 7.5 per cent for SKD vehicles and five per cent for CKD vehicles. The reduced amounts are five per cent for SKD vehicles and three per cent for CKD. For personal cars above 2001 CC, tariffs were cut to 5 per cent for SKD and 3 per cent for CKD from 40 per cent for CBU, 7.5 per cent for SKD and 5 per cent for CKD. The tariffs for personal three-wheelers were reduced to 3 per cent for SKD, 1.5 per cent for CKD from 20 per cent for CBU, 7.5 per cent for SKD and 5 per cent for CKD.

Moreover, auto parts for trucks, body and building, commercial three-wheelers, and buses were set at 10 per cent for CBU, 7.5 per cent for SKD and 5 per cent for CKD. They are now at 3 per cent for SKD and CKD, respectively. The tariff for motorcycles was also reduced to 1.5 per cent for SKD and CKD compared to the previous duties of 3 per cent for CBU, SKD and CKD.

MoC announces 1,100 HS codes for Customs warehousing

The Ministry of Commerce nod­ded four import categories in customs warehousing with 1,100 HS codes, including pharmaceu­ticals (117 HS codes), electric vehicles and related parts (56 codes), industrial raw materials and chemicals (866 codes) and food raw materials (61 codes).

Apart from those goods au­thorized in customs warehous­ing, seeking an import licence for the goods before arrival at the port is obligatory, and fail­ure to do so is subject to a fine and sentence under the existing laws. Without obtaining a permit, no one shall be allowed to export and import the specified goods that need to seek a licence. The Trade Department warned the exporters and importers of pen­alties for non-compliance with the Export and Import Law, di­rectives and guidelines starting from 1 July 2024. It informed them to seek licences first as pre-arrival documentation for all types of shipment by air, sea and road.

Manufacturing

CMP garment sector shows positive growth in 2024

MYANMAR garment manufacturers received growing foreign orders this year as the garment orders improved significantly. The buyers who were supposed to go to Bangladesh turned to Myanmar after Bangladesh doubled labour wages. Myanmar’s manufacturing sector is primarily concentrated in garment and textiles produced on a Cutting, Making, and Packing basis, and it contributes to the country’s employment and GDP to a certain extent.

Transportation

Yangon-Kawthoung-Ranong container shipping starts at end June

The container shipping to and from Yangon-Kawthoung-Ranong for Myanmar-Thailand border trade will commence at the end of June 2024. MV Beypore Sultan of Gold Shipping Agency Services Limited loaded with maize will leave for Thailand’s Ranong Port and it will carry goods from Ranong to Yangon Port. That border trade must be in accordance with the standard operation procedures (SOPs) of the departments concerned. The Trade Department under the Ministry of Commerce gave the go-ahead to container shipping to and from Yangon-Kawthoung-Ranong for Myanmar-Thailand border trade.

COVID

  • In order to continuously control the infection of COVID-19, the rules and restrictions have been extended until the end of July 2024.