Pressure eases on Myanmar inflation due to declining consumer demand

Declining consumer spending and demand as a result of COVID-19 has suppressed inflation levels in Myanmar. Inflationary pressure first showed signs of easing in March, after the first cases of the coronavirus were reported in Myanmar. Inflation has continued to decline over the past three months, settling at 7.9 percent in June. The trend of falling inflation is similar to the rest of the world. Consumers all over the world and in Myanmar are spending less due to COVID-19 restrictions. Domestic consumer demand is falling and this is resulting in softer inflation.

Inflation in Myanmar had in fact been on a steady rise before the pandemic. Local businesses have suffered as a result of poor consumer demand. Due to COVID-19, the majority of Myanmar firms have experienced lower sales and cash flow shortages, resulting in reduced access to credit needed to support operations. The survey also revealed that 16 percent of firms had temporarily closed their operations for an average of eight weeks as a results of COVID-19.

As a result, Myanmar’s inflation is forecast to fall further this year and remain at around 6pc until next year. Meanwhile, GDP growth is forecast to drop from 6.8 pc in fiscal 2018-19 to just 1.8pc in the current fiscal year. The World Bank’s forecasts are more dire, with GDP expected to slump to just 0.5pc last year. However, if the domestic spread of the coronavirus is brought under control and the global economy recovers swiftly, GDP could recover as soon as next year, reaching 6pc according to ADB and 7.2pc according to the World Bank.

Source: Myanmar Times

Myanmar’s border trade with neighboring countries sees US$ 8.6 billion

Myanmar’s border trade with neighbouring countries reached US$8.6 billion as of late July in the current financial year, an increase of over US$280 million compared to the same period of last financial year. Myanmar’s border trade with its neighbours was US$8.3 billion in the same period of financial year 2018-2019. Myanmar’s export volume through its borders fetched US$5.8 billion while the country’s import reached over US$2.7 billion. Muse border saw the largest volume and value of Myanmar’s total border trade, with an estimated value of over US$5.4 billion, followed by Myawady with US$858 million and Chinshwehaw with US$554 million during that period. The Sino-Myanmar border trade through all five border crossings has registered over US$4.7 billion in the current financial year, a decrease of US$123.5 million compared to the same period of last financial year, according to the ministry’s statistics.

Border trade with China was valued at US$3.89 billion through Muse border gate in this FY, US$123.35 million via Lweje, US$430.7 million via Chinshwehaw, US$263 million Myawady Trade Zone is Myanmar’s second largest border trading post. The decline in bilateral trade is attributed to the suspension and delay of some commodities amid the tight security measures of coronavirus. China has been beefing up border control measures to curb the spread of the coronavirus infection. China’s investment in Myanmar during the period from 1988 to date was valued at more than US$20 billion which is equivalent to about 26 per cent of total FDI in the country. The trade volume between Myanmar and Thailand has reached US$2.71 billion in total, a decrease of US$103.9 million compared to the same period of last year, according to ministry. The bilateral border trade saw US$2.82 billion in last year. Myanmar-Thailand border trade totalled US$2.711 billion between 1 October last year and early this year, which included US$1.95 billion in exports and US$757 million in imports. The Hteekhee border recorded the highest trade value of US$1.35 billion, followed by Myawady with US$820 million and Kawthoung with US$299 million. The country mainly conducts border trade with Thailand via seven borders Tachilek, Myawady, Kawthoung, Myeik, Hteekhee, Mawtaung and Mese checkpoints. Meanwhile, Myanmar-India border trade is down by over 40% for the current financial year due to the temporary closure of border posts amid the ongoing COVID-19 pandemic. The trade value went down from US$128 million to US$76 million for the same period, a decrease of 40% compared to the same period of last financial year. The two countries conduct border trade mainly through the Tamu, Reed, Thantlang, and Kenglap cross-border trade camps, while a major part of bilateral trade is carried out via the sea.

Myanmar-Bangladesh bilateral trade via border checkpoints was valued at over US$747.63 million as of 26 June in the current 2019-2020 financial year, an increase of US$730 million from the corresponding period of last
year. When compared with last FY, this FY saw a significant surge in the value of exports by US$427.42 million while the bilateral imports rose by US$302.96 million. Between 1 October last year and 26 June this year, Myanmar transported commodities worth US$443.4 million to Bangladesh and imported goods valued at over US$304.2 million. Myanmar exports goods to Bangladesh through both maritime and land routes. Myanmar mainly exports agricultural products, animal products, marine products, minerals, forest products, manufacturing goods and others while capital goods, intermediate goods to neighbouring countries and consumer goods, machinery and medicine are imported to the country. Around 20 percent of Myanmar’s total trade is conducted through its border crossings and the remaining 80 percent is done by sea route.

Source: The Global New Light of Myanmar

SEZs rake in over $116 mln investments as of July-end

Foreign investments of US$116.557 million have flowed into the Special Economic Zones (SEZs), under the Special Economic Zone Law, as of July-end in the 2019-2020 financial year since October 2019, according to the figures released by the Directorate of Investment and Company Administration (DICA). Since its establishment, over 110 enterprises from 18 countries and four local businesses have ploughed in nearly $2 billion as of July-end, 2020 in the zones, the investment source indicated. While the manufacturing sector has absorbed the largest share of foreign investments, FDI has also flowed into the trading, other services, transport and logistics, real estate, and hotel sectors.

Japan has topped the list of foreign investors so far, accounting for over 34 per cent of the overall investment, followed by Singapore and Thailand. FDI has also flowed into the SEZs from the Republic of Korea, Hong Kong, the UK, Australia, the UAE, Malaysia, Austria, China (Taipei), Panama, China, Brunei, Viet Nam, France, Switzerland, and the Netherlands. Myanmar is currently implementing three Special Economic Zones — Thilawa, Kyaukpyu, and Dawei. Out of the three, Thilawa is leading to better infrastructure and successful businesses. At present, more than 80 businesses are operating in the Thilawa SEZ. The SEZ has employed more than 12,000 permanent workers, including construction workers, according to the management committee. More than 60 per cent of businesses in Thilawa is domestic- oriented manufacturing enterprises. In comparison, 40 percent are export-oriented manufacturers, according to a press statement issued by Myanmar Thilawa SEZ Holdings Public Ltd in June 2019.

A company exporting at least 75 per cent of the production in value is registered as a Free Zone investor. It is exempt from paying corporate tax for seven years from the time it starts commercial operations. Companies such as logistics, which support export-oriented manufacturing, can also be listed as free zone companies. Domestic-oriented manufacturing companies are regarded as promotion zone companies, and they are eligible for a five-year holiday on corporate tax. There are other tax incentives for the free zone and promotion zone investors on the importation of capital goods, raw materials and merchandise, and consigned products and vehicles.

Source: The Global New Light of Myanmar


New G Bank branch opens in Myawady border town

As new banking services expand in Myanmar’s economic sector, Glory Farmer Development Bank, or G Bank for short, opened a new branch office in Myawady Township, Kayin State, on 7 August. With the new branch in Ward 4, Bamar Su 8 in Myawady and its headquarters on Yuzana Road in Bayint Naung Warehouse, Yangon, G Bank offers standard banking services such as depositing or withdrawing cash, domestic and payment orders during its operating hours and is striving to extend its reach to other prominent cities across the nation.

G Bank is offering a maximum interest rate of 8.7% in a fixed deposit account with a minimum tenure of one year to commemorate the opening of its Myawady branch in addition to other souvenirs.G Bank aims to offer balanced, outstanding services to all its customers in line with its code of conduct and integrity while keeping astride with technological developments to ensure banking services are accessible to all people.

G Bank opened its first branch in Monywa, Sagaing Region, in the month of September in 2018 and bases its mission on developing the agricultural sector, which can be regarded as the lifeblood of the nation.G Bank’s objectives also include making banking services accessible to everyone through the use of technology while incorporating ingenuity, responsibility, accountability, ethics and rules and regulations issued by the Central Bank of Myanmar in its services.

Source: The Global New Light of Myanmar

1200px-Pathein_City

JV to build Ayeyawady International Industrial Port in Pathein

Ever Flow River Group Public Company (EFR) joined hands with Ayeyar Hinthar Holdings Co., Ltd (AHH) to implement Ayeyawady International Industrial Port (AIIP) and set up a joint venture namely A Logistics Co., Ltd, according to the EFR’s press statement. Unison Choice Services Limited, a subsidiary of EFR, owns 60 per cent of shares of A Logistics Co., Ltd and 40 per cent are held by AHH Co., Ltd. They signed an agreement to implement multi-sectoral infrastructure development project AIIP in Pathein town, Ayeyawady Region.

The JV has carried out a feasibility study for over a year. The project includes bonded warehouses, container yard, international port terminals, and necessary infrastructure. Later, the port can handle international ships and ocean liners, as per the statement. The project is situated on about 6,700 acres of land in Pathein-Ngaputaw Highway. As per the agreement, A Logistics Co., Ltd will operate AIIP project, build the workforce, work design, support logistics to manufacturing and trading sectors, provide ocean freight service to penetrate the local products to the international market, import raw materials for CMP businesses and agriculture sector, and offer comprehensive logistics services.

Upon the completion of the project, it will bring about the market competitiveness, promoting Myanmar’s agro products in the international market, access to high-quality products, local productivity growth and job opportunities. 

Source: The Global New Light of Myanmar

Prudential Myanmar introduces first-of-its kind digital health and fitness module on AI-powered app Pulse

To promote healthy habits among the people of Myanmar, Prudential has launched its first fully digital product PRUTerm Digital. PRUTerm Digital is a one-year term-life insurance product that provides financial protection against unfortunate and unforeseen events such as death, disability, and additional benefits for hospitalization due to accidents. Available exclusively on Prudential’s artificial intelligence(AI)- powered app- Pulse, PRUTerm Digital is an affordable product at 25,000 Ks and provides standard insurance coverage of 2.5 million Ks for one year. In addition, the customers can start enjoying the “Healthy Habits” pilot module on Pulse, which is designed to help them purse and track fitness activities, and receive rewards of free, additional insurance coverage based on their progress.

Pulse is now available in Myanmar and downloadable for free on both Apple App Store and Google Play Store. Through Pulse, Prudential aims to make healthcare accessible and affordable for everyone in Myanmar. To provide a seamless and delightful experience to customers, Prudential uses the latest advancements in AI and machine learning to automatically capture key customer information fields from their NRCs, followed by instant underwriting along with instant issuance of the insurance policy. The purchasing experience will be amongst the simplest with just a few clicks and digital payment through the WavePay App. Pulse also helps users to “earn points” easily by doing at least 15 minutes of daily healthy habits such as walking and running. The points automatically lead to an increase in insurance coverage at no additional cost. There are also other exciting and exclusive benefits to be enjoyed if users “share” with friends and family.

“Healthy Habits” of PRUTerm Digital reaffirms Prudential’s commitment to helping Myanmar people and communities lead healthy lives.It aligns with the company’s brand spirit of “We DO Health” and “We DO Fitness”. Prudential is committed to bringing in the latest insurtech and healthtech advancements to Myanmar through its AI powered app Pulse, which has been downloaded more than 8 million times in Asia, helping individuals and families get the most out of their lives. Research has proven that carrying out a healthy activity for just 45 minutes every day can go a long way in transforming the health and well being of individuals across age groups. Technology can also play a significant role in quipping individuals with the tools and features to purse and track health and fitness activities of their choice.

Source: Myanmar Times

Traders to broker direct imports, exports between Myanmar, India

The Upper Myanmar India Association will start its own trade brokering business after the Myanmar economy returns to normal following the COVID-19 pandemic. The purpose is to connect traders from Myanmar and India who want to business. Even though traders from India want to do business in Myanmar, many have no point of contact here. So if India’s traders who trade care accessories, medical products or peas come for business.

Since the outbreak of COVID-19 in March, trade between the two countries has come to a halt and border gates at Chin State, Sagaing and Mandalay, which have been the main trading routes between northeastern India and Myanmar since 2017, have closed. Trade is conducted via maritime routes only. In fiscal 2018-19, trade totaled US$201 million. This is consisted mainly of exports worth US$177.5 million. Both countries had just opened the border checkpoint between Reekhorda town in Chin State and Zowkharthar village in Mizoram, in August 2018.

The Reekhorda-Zowkharthar post is the second trade gate between Myanmar and India. The other trading post is located at Tamu in Sagaing Region and Moreh in Manipur, India, which opened up for regulated trade in 2018. There is also an integrated check post (ICP) in Tamu- Moreh, allowing both Myanmar residents and foreigners to enter India as well as goods on vehicles. Before the pandemic, the Japan International Cooperation Agency had been upgrading a road linking Reed to Tiddim and Kalay in Chin State to improve trade. Myanmar mainly exports betel nuts, beans and pulses as well as garments and plastics to India at the border.

Source: Myanmar Times

German companies in Myanmar struggle to meet investment targets

German companies in Myanmar are scaling down further investments and expansion plans as COVID-19 continues to play out across the country as well as the rest of the world. The Delegation of German Industry and Commerce in Myanmar (AHK) recently released its business outlook survey report- AHK World Business Outlook 2020 Results for Myanmar- measuring business confidence and the impact of the coronavirus on German companies in Myanmar.

The majority of German companies in Myanmar expect the economy to recover by next year at the earliest, while 46.7pc in the survey expect an economic recovery in the course of 2020. More than two thirds of the companies see the lack of business support measures as the main challenge to overcome the current economic crisis. The support measures provide a number of very interesting incentives and are certainly perceived as helpful but 75pc of the companies who responded in the survey also suggested that the measures might not be enough to overcome the crises and would hope for more support.

Total trade volumes between Myanmar and Germany surpassed US$820 million in fiscal 2018-19. This year, Myanmar exported a total of US$620 million worth of goods, mainly garments and textiles, to Germany. It imported a total of US$190 million worth of goods, mainly machinery and pharmaceutical products from Germany. Meanwhile, five other German businesses have invested US$34 million worth of investments in Myanmar to-date. The largest investment by a Germany company in Myanmar is Metro Wholesale, which has channeled approximately US$10 million in its retail operations in the country.

Source: Myanmar Times

71 projects worth $7.9B added to Myanmar Project Bank

A total of 71 new projects have been added to the Myanmar Project Bank since the start of the year, taking the list of projects to 129. The new projects include the US$900 million Yangon Elevated Expressway, $847 million No.1 Steel Mill in Myanmar in Myingyan, $660 million Sagaing international textile-based industrial cluster and the $524 million Bago-Kyaikhto highway.

The 71 projects have a combined value of $7.9 billion. The other projects include power infrastructure, solar and wind projects, roads and bridges, and recommissioning of state-owned factories. The Myanmar Project Bank was launched on February 26 with 58 projects. The loftiest project is the Yangon Central Station, which involves an investment of more than $2.1 billion. The project bank is an interactive web-based platform designed to highlight investment projects in line with the implementation of the Myanmar Sustainable Development Plan (MSDP) for 2018-2030.

The project bank represents “an online one-stop-shop, where all information on projects designed to implement the MSDP can be easily accessed with a single click”. It also establishes a reliable and transparent system which links major investment projects with appropriate sources if finance including Public-Private-Partnerships and provides more opportunities for the private sector to contribute to national development. All the projects are strategic in nature and align with MSDP.

Source: Myanmar Times

Myanmar govt’s plan to promote local tourism clashes with COVID-19 preventative measures

The government has launched a plan to boost local tourism as international tourists remain locked out of the country due to commercial flight restrictions, this has clashed with its efforts to control COVID-19. On July 30, several famous pagodas in Bagan banned travelers from visiting 17 famous pagodas due to “health concerns.”This was despite local having already booked their transport and accommodation. Meanwhile, famous beaches in Ayeryawady like Ngwe Saung and Chaung Tha remained off-limits to visitors during that weekend, with travelers being advised that COVID-19 inspections were yet to be complete in the area.

The decision to reopen famous tourist destinations as part of the government’s tourism recovery plan will be made by the Central COVID-19 Committee. While precautions are necessary in managing the pandemic domestically, tourism businesses say they are unable to resume operations even though the government has pledged support for the sector. The majority of local agencies have suspended their operations while just a few are providing booking services for air ticket and hotel rooms. Many tour operators expect the Myanmar tourism industry to bounce back only next year.

The majority of locals are expected to travel mainly for religious reasons and during long weekends for relaxation purposes, local travel and tourism firms. Meanwhile, the Ministry of Hotel and Tourism will start conducting a survey on domestic travelers in an effort to support and improve the sector. The online survey includes 18 questionnaires related to the spending power, duration of travel and lodging preferences of local travelers.

Source: Myanmar Times