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IMF projects muted growth for 2021 economy

by 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

by TRADING

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

by TRADING

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

SMEs to apply for tourism loans from MTB

by HOTEL & TOURISM

Tourism-related small and medium-sized enterprises (SMEs) can now apply for loans at Myanmar Tourism Bank (MTB) through the 11 associations under the Myanmar Tourism Federation (MTF) as collateral and insurance, according to the MTB Head Office. There are 11 associations in Myanmar tourism industry in the pandemic period. The Memoranda of Understanding (MOUs) were signed between the team in each sector. The working processes are being taken step by step to provide the loans to SMEs under these associations.

The MTB Head Office has a loan department. SME businesses can directly contact the MTB’s loan department. Now, the department is also providing loans to the team’s small businesses. However, it is more convenient to reach MTB through the relevant associations. The department again postponed the interest payment period and deferred the repayment dates during the pandemic period. When the tourism businesses resume in the aftermath of COVID-19, the department will provide more loans to the SME businesses, said the MTB deputy managing director.

MTF has 11 associations related to the tourism sector, including souvenir sale shops, hotel associations, and restaurant shops. MTB is providing loans to SME businesses under these 11 associations starting from last year. MTB firstly offered K 20 million loans to SMEs without the collaterals. The loans will be provided depending upon the collateral application. Under the Central Bank of Myanmar, the interest claiming period will be postponed in the pandemic period. At present, the loan interest rate of MTB is 10 per cent. MTB Head Office was opened on Pyay Road, Kamayut Township, Yangon. According to MTB Head Office, the bank has already been opened up to six branches across the country.

Source: The Global New Light of Myanmar

Domestic gold price down in global plunge

by ECONOMY

According to the gold prices skimming in the global market, the gold market price in Myanmar has dropped to K1,318,800 per tical (0.578 ounces, or 0.016 kilogrammes) the domestic gold market. Although the global gold price stood at US$1,955 per ounce on 6 January, it plunged to $1,828 per ounce on 16 January with a decrease of over US$100 in 11 days as per market data. Similarly, the local gold price has fallen as a result of the situation in the international market.

The local gold price was only around K1,336,000 per tical on 6 January, but it spiked to K1,318,800 per tical on 16 January. Within 11 days, the domestic gold price plunged by K12,000 per tical. The local dollar exchange rate was also on the downside. At present, the local dollar exchange rate stands at around K1,339 per dollar. At the end of last year, the local gold reached the lowest K1,310,500 (2 September) and the highest level of K1,314,000 (1 September). In October, the rate ranged between K1,307,800 (30 October) and K1,316,500 (21 October).

The pace changed between the highest of K1,317,000 (9 November) and the lowest of K1,270,000 (30 November). In December, the pure yellow metal price moved in the range of K1,280,000 (1 December) and K1,332,000 (28 December). With the global gold prices on the uptick, the domestic price hit fresh highs in 2019, reaching K1,000,000 per tical between 17 January and 21 February, crossing K1,100,000 (22 June to 5 August), climbing to K1,200,000 (7 August-4 September), and then reaching a fresh peak of K1,300,000 on 5 September, according to the gold traders.

Source: The Global New Light of Myanmar

There are around 13,350 high-end condominiums in Yangon, and prices have fallen by 10% to 15% compared to the last six months due to weak demand

by ECONOMY

There are around 13,350 high-end condominiums in Yangon, and prices have fallen by 10 to 15 percent compared to the previous six months due to weak demand, according to Colliers International (Myanmar), a Canadian-based international real estate services provider, in the third quarter of 2020. By the end of 2018, Rangoon was expected to have 10,553 international standard condominiums, but due to construction delays, there were only around 12330 in the fourth quarter of 2019. Due to declining demand in the market, mid-range and high-end condominiums are selling faster than high-quality and high-end condominiums, and luxury rooms are still more expensive due to demand from the rich. Nearly 3,000 more units are expected to be added in 2018, but most projects have been delayed due to delays.

 In the first quarter of 2019, 650 new chapters; 485 new rooms in the second quarter; In the fourth quarter, only 1,250 units entered the market. In 2019, 40% more rooms than in the same period last year. In the fourth quarter of 2019, the number of rooms increased by 11% compared to the previous quarter. In the first quarter of 2020, 730 units entered the market, and in the third quarter of 2020, it reached 13,350 units, an increase of 5.8% compared to the same period last year. By 2020, there will be nearly 30 condominium projects under construction, most of which have been delayed. Despite the market downturn, there will be around 14,000 condominiums by the end of 2020 due to the presence of Southall condominiums.  By the end of 2021, it is expected to have around 17,500 rooms.

The condominium purchase rate increased from 57% in the fourth quarter of 2017 to 59.2% in the first quarter of 2018. Third quarter of 2018 58% in the fourth quarter and first quarter of 2019; 53% in the second quarter of 2019; 61% in the fourth quarter of 2019; In the third quarter of 2020, it was 61 percent, and sales of condominiums that did not provide enough parking space were declining. Policy changes in 2016 delayed the operation of high-rise buildings, and as a result, the number of new condominium units in high-rise buildings decreased in the third quarter of 2018. Demand declined from the fourth quarter of 2018 to the second quarter of 2019, and rebounded from the fourth quarter of 2019. In 2016, Colliers estimated that an average of 2,100 condominium units would be produced annually over the next five years, but due to project delays, there will be around 1,600 units in 2016 In 2017, there will be around 900 rooms.

 In 2018, around 500 rooms; In 2019, about 3,000 new rooms appeared. The average price of an international standard condominium in Myanmar ranges from over $ 90,000 to around $ 900,000, and in the third quarter of 2020, the average price of the mid-range apartment is around $ 100,000 to $ 200,000. The average prepaid purchase rate increased from 53% in 2016 to 60.5% in 2017; It rose to 85 percent in 2018 and fell to 52 percent in early 2019. It rose to 61 percent by the end of 2019 and 61 percent in the current third quarter of 2020. According to Colliers, 14% of Myanmar’s international standard condominiums are medium-sized; 37% higher than average; High quality 36%; It has a luxury rating of 12%. In the fourth quarter of 2019, the average price per square meter of condominium was $ 1,500; $ 1,800, higher than average; $ 3,300 for high quality; $ 3,700 for luxury.

Source: Daily Eleven

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Corn powders exported to Thailand via Myawady despite pandemic

by TRADING

Although the coming into and going out of the border areas are restricted because of the pandemic, corn powders are still exported to Thailand through Myawady trade zone, according to the Myanmar Corn Traders. Although Thailand has set a time limitation and export volume for import of corn, there is no restriction imposed on corn powder. Good Agricultural Practice (GAP) certificate has not been requested yet for export of corn powder to Thailand. Still, export requires attaching of a Phytosanitary certificate and the country of origin (CO) form. Similarly, these certificates must be produced in the export of maize. Myawady trade zone also scrutinizes and issues the Form-D to enable export of corn and corn powder.

Myanmar traders are exporting corn and corn powders to Mae Sot, Thailand, through Myawady border trade zone. Thailand traders refine the imported corn powder to re-export to Malaysia, China and Laos. The price of grained corn (FOB) exported to Thailand through Myawady border trade zone is sold for 7 or 8 baht per kilo while the corn powder is sold for US$220 per tonne. According to the corn traders, the prevailing price of grain corn in Myawady market is 8.5 or 9 baht per kilogramme. The high-quality FOB corns are sold for 8 or 10 baht per kilogramme (K480 or K485 per viss). Only maize with moisture content below 14.5 and 15) sells well in the trade market, the corn traders said Myanmar could export the corn to Thailand by attaching Form-D between 1 February and 31 August.

After that time, Thailand will impose 73 per cent of tax on corn import as per the notification submitted to the World Trade Organization (WTO). Myanmar exported 2.2 million tonnes of corn to the foreign market in the past FY 2019-2020, with an estimated value of $ 360 million, the Ministry of Commerce’s data showed. Corn is cultivated in Shan State, Myingyan and Taungtha, Sagaing region and other regions along the Ayeyawady River.
The highest quality corns that are demanded from Thailand are produced from the areas along the Ayeyawady River. Myanmar has three corn seasons — winter, summer and monsoon. The country yearly produces 2.5-3 million tonnes of corn. Myanmar primarily exports corn to Thailand and China market. They are also shipped to Malaysia and Laos. 

Source: The Global New Light of Myanmar

Fishery exports cross $700 mln

Fishery export prices to Thailand plunge by 50 per cent

by TRADING

MYANMAR fishery products’ export price to leading buyer Thailand slumped by 50 per cent, said U Win Kyaing, general secretary of Myanmar Fisheries Federation (MFF). Myanmar mainly ships mackerel fish to Thailand through Kawthoung-Ranong border. It fetched 100-120 baht per kilo last year, and the price sharply fell to 50-55 baht per kilo. Thailand did not stop trading, yet the offering price drastically dropped. During a bear market, the income generated by fishery products also decreased. Surprisingly, the market experienced a 50 per cent drop.

At present, the country is primarily conducting border trade with Thailand’s neighbouring country through those border posts; Kawthoung-Ranong, Mawtaung in Myeik, Hteekhee in Dawei and Myawady. Thailand has shut down the border with Hteekhee and Mawtaung. The central trading post (Kawthoung-Ranong) is still open for trading. However, to contain the spread of COVID-19, Myanmar traders cannot enter Thailand’s side, and the trading occurred only at the pier. Kawthoung-Ranong generated an income of US$250 million out of total fisheries export value with Thailand at $318 million in the previous financial year2019-2020, MFF stated.

Thailand is the primary buyer of Myanmar’s fisheries
products. Last FY, Myanmar shipped $318 million worth fisheries products to Thailand, while the total fishery exports stood at $850 million. The federation expects to reach fishery export target of $1 billion in the current FY2020-2021. Nevertheless, the fishery exports touched a low of $242.352 million between 1 October 2020 and 1 January 2021, which plunged from $261.994 million registered a year-ago period. The figures reflected a decrease of $19.6 million over the Q1 of the current FY compared with the last FY2019-2020, the Ministry of Commerce’s data showed. Myanmar’s fisheries products are exported to 45 foreign countries, and Thailand is the primary buyer of the fisheries products, followed by China.

Source: The Global New Light of Myanmar

IMF approves second emergency financial aid for Myanmar

by ECONOMY

The International Monetary Fund (IMF) has approved the release of financial assistance amounting to SDR 258.4 million to help Myanmar minimise the economic and social impacts of the COVID-19 pandemic. A statement from the IMF released on January 13 said their executive board approved a disbursement of SDR 86.1 million (16.67 percent of quota) under the Rapid Credit Facility (RCF), and a purchase of SDR 172.3 million (33.33pc of quota) under the Rapid Financing Instrument (RFI) for Myanmar. The total adds up to approximately US$372 million.

The SDR is an international reserve asset created by the IMF in 1969 to supplement its member countries’ official reserves. The value of the SDR is based on a basket of five currencies- the US dollar, the euro, the Chinese renminbi, the Japanese yen, and the British pound sterling. 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.

According to the statement, this is the second emergency financial assistance that IMF will be providing for Myanmar following the COVID-19 outbreak. The IMF executive board approved a disbursement of US$ 356..5 million for Myanmar on June 26, last year. This brings the total IMF financial assistance provided to Myanmar to address the ongoing pandemic to approximately US$700 million.

Source: Myanmar Times

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Myanmar cancels contracts to develop Dawei SEZ with ITD

by INVESTMENT

The Italian Thai Development Public Company (ITD) has informed the Stock Exchange of Thailand that contracts signed between the company and Myanmar involving work on the first phase of Dawei Special Economic Zone have been cancelled. Myanmar was reported to have cancelled seven out of eight contracts made in 2015 for development of the SEZ after ITD failed to deliver its part of the agreement. When contacted, the Dawei SEZ Management Committee from Myanmar said the cancellations have yet to be officially announced. They have yet to approve the cancellations and have no comment at the moment.

The ITD is seeking legal counsel on how to proceed given the circumstances. Last month, the Japanese government said that it would commence a survey to determine the total amount of capital expenditure required to participate in the development of the Dawei deep sea port project. Myanmar is now counting on financial and technical support from Japan to kickstart construction of the long-delayed SEZ after Japan in November made an official offer to Myanmar and Thailand to invest in Dawei.

The DAwei SEZ is expected to be the largest SEZ in South East Asia- about eight times larger than Thilawa SEZ in Yangon- and over ten times larger than Kyauk Phyu SEZ in Rakhine when complete. Located 20 kilometers north of Dawei, the captial of Tanintharyin Region in Myanmar’s southeast coast bordering Thailand, the Dawei SEZ comprises 20,000 hectares of land and includes industrial as well as port facilities. Loans have been acquired from the Thai to construct a highway between Dawei and the Thai Border, which will be complete in 2023. Work to connect the SEZ to the national grid is expected to be completed in 2023 as well.

Source: Myanmar Times