Business Article


Monthly Business Brief, January 2024

February 1, 2024

Economy

Extension of SAC for another six months

According to National Defence and Security meeting on 31 December 2023, SAC cited the unusual circumstances of the country at the moment which interfered with their ability to carry out elections and restore peace and order and the council decided to extend for further six months.

Four Union Ministers for SAC Chairman Office

The SAC appointed Admiral Moe Aung, formerly commander-in-chief of the Navy as National Security Advisor. Additionally, he was appointed as Union Minster for Ministry (4) at the Office of Chairman of the State Administration Council. U Ko Ko Hlaing, previously Union Minister for International Cooperation, was appointed Union Minister of Ministry (1). U Aung Naing Oo, who held notable positions in investment, commerce and was Union Minister of Ministry (2). U Aung Kyaw Hoe is appointed as Union Minister of Ministry (3).

 

9,000 Myanmar workers went Korea under EPS in 2023

More than 9,200 Myanmar workers received employment in Korea under its Employment Permit System (EPS) in 2023. Overseas employment agencies in Myanmar can only send workers under this system. Most migrant workers are currently headed for the agricultural and livestock sectors, as well as construction. A few skilled tradesmen, including welders, were also recruited under E-7-3 visas to work in shipbuilding. In recent times, South Korea has been increasing its overseas recruitment to fuel its economic growth.

Banking and finance

CBM injected USD and Thai baht to FE market

In January 2024, the CBM sold US$ 68.4 million to boost liquidity in the FX market and import of essential commodities.  In addition to US$ dollars, the CBM also injected 335 million Thai Baht (US$ 12 million) and 4.2 million RMB into the market. These events represent a trend in government intervention in the FX market, which it has not done since 2021. In December last year, the government injected US$22 million to fuel oil importers to avoid impending shortages.

 

CBM intensified actions on illegal hundi business and twenty players arrested

As part of its focus on boosting official remittance rates, the CBM has employed stricter measures on illegal Hundi (informal money transfer) services. It has been collaborating with several law enforcement agencies to investigate instances of Hundi operations.

Police have taken action against twenty individuals accused of running Hundi schemes. A further twenty are facing lawsuits in their respective townships.

The CBM has authorized 14 companies to conduct remittance services as of 14 December 2023. The need for official remittance channels has increased since the government has announced that Myanmar expatriates must remit a percentage of their income as well as a 2% income tax.

Kyat depreciation at OTC market

The OTC exchange rate for the dollar, as of January 31, stood at over Ks.3500. Previously, it had maintained a steady position around Ks.3450.

Trade

Export highlights of key sectors

As of 5 January 2024, Myanmar has earned a total of US$ 10.9 billion in exports. The Ministry of commerce has revealed that the largest source of export earnings was from garment exports, at US$ 3.3 billion, followed by natural gas exports at US$2.5 billion. Collectively they represent over half of all export earnings.

 

The agriculture also contributes a significant number of export earnings. The country exported agricultural products including rice and broken rice, beans and pulses, maize, rubber, and many others. The total valuation of these products is over US$2 billion.

 

The top ten trading partners this fiscal year, according to the MoC, are Thailand, China, Japan, India, the United States, Germany, Poland, Spain, South Korea, and Italy.

 

Myanmar auto market saw increase in sales

According to the Myanmar Automobile Manufacturers and Distributors Association, the domestic vehicle market is currently seeing a spike in sales. Specifically, cars within the price range of Ks. 30 million and Ks. 200 million are performing better in sales in the current market. The auto market has been operating quietly with no major fluctuations; however, demand for smaller vehicles have picked up compared to December last year. While there were sales reported for more expensive vehicles, they were infrequent, according to the secretary of the association.

Myanmar imported 6,900 vehicles in 9 months

The Ministry of Transportation and Communications has revealed that in the current fiscal year, 6,906 vehicles were imported into the country, including 1,780 passenger cars and 50 busses. In addition, trucks, construction vehicles, and miscellaneous accessories were also brought in. The total value of the imports was reported to be US$235.02 million, which was more than double that in last fiscal year.

EV cars import and discussion for assembling plants

The latest batch of Yutong branded EV chargers, rated for 80KW, arrived at Yangon Port on January 23rd, according to the Ministry of Information. The Chinese manufactured equipments were imported by Yar Zar Min Industry, with permission from the leading committee responsible for the promotion of EVs in the country.

There has been a regular stream of EV imports in the country after EVs were exempted from commercial tax and special goods tax, beginning from October 2022. A number of local automobile companies have imported EVs from brands such as BYD, Toyota, MG, and Karry. A total of 1,888 EV Passenger cars and light trucks have been imported and registered at RTAD.

Manufacturing

Investment for EVs assembling plant

It is learnt that overseas EV companies are discussing with officials of Myotha Industrial Park City (MIPC) near Mandalay to find out opportunity to invest in EVs assembling plants in MIPC.

Loans for MSMEs at low interest rates

Micro, Small, and Medium enterprises will soon be able to apply for loans at competitive interest rates. Depending on the size of the company, they will be able to borrow starting from Ks. 10 million up to Ks.100 million. Interest rates are set between 3%-5% per year depending on whether the loan is used for fixed capital or working capital; the loan period is up to 18 months.

MSMEs in the following groups will be prioritized: manufacturer of high value products; exporters; producers utilizing local raw materials; producers of  import substitution products; job creators; waste and hazard management; and healthcare companies.

Energy

Solar panels sales surged over generators

Electronic companies are reporting surging sales of solar panels and other photovoltaic equipment.. Solar equipment sales have edged out the traditional generator. Store owners have noticed that most purchases are ordered from other region and states than the capital Yangon.

 

Fuel prices hike at end of January

According to reference prices revealed by the Fuel Oil Supervisory Committee on January 26, fuel prices have increased across the board. Octane-92 increased by Ks. 100 to Ks. 2705 per liter; octane-95 at Ks. 2845 per liter; diesel at Ks. 2450 per liter; and premium diesel at Ks. 2515 per liter. Despite rising costs, there were no reported instances of long queues at fuel stations as has happened in the past during fuel shortages.

Transportation

Air KBZ renamed to Mingalar Airlines

Air KBZ Airlines, a subsidiary of KBZ group, has rebranded to Mingalar Aviation Services on January 6th, according to its official Facebook page. The airline with continue to operate its 13 domestic flights under the name Mingalar Airlines. Mingalar Aviation is one of the few privately operated airlines in Myanmar, alongside Myanmar Airways International.

Air KBZ Airlines was established on June 2010, and began operating domestic flights a year later with a fleet of 12 commercial aircraft. In 2015, it began expanding its range of destinations both domestically and internationally, and began code-sharing international flights with MAI.

Direct shipment of goods from Inland Logistic Port to Thilawa Port

Goods are now shipping directly from the Mandalay region to Thilawa port by train. RGL Dry Port, located in the town of Myitnge, officially commenced operation on January 1st , 2024. The connection will help facilitate the transfer of Mandalay-produced goods such as rice, pulses and beans, and gems and minerals, at very affordable rates, as it will be utilizing the already established national rail network. Moreover, it is located near key manufacturing zones. Its first successful shipment was 20 containers (490 tons) of maize headed for export to the Philippines.

Tourism

Over one million international tourists and 8.8 million domestic tourists in 2023

The Ministry of Hotels and Tourism is expected a growth in tourist numbers after a favorable increase in 2023. In 2023, there were 1.24 million international tourists and 8.85 million domestic travelers ; a massive increase over the previous three years. Most international arrivals are from Thailand and China.

The Ministry continued to highlight the importance of public-private cooperation to develop the tourism sector. The government has sought to promote tourism overseas and has begun trialing Visa-on-Arrival for Indian and Chinese tourists. There are talks to adopt the Russian payment system Mir to better accommodate Russian visitors.

 

COVID

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

Bulletin

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