Economy
According to Myanmar Economic Monitor June 2023, the World Bank forecasted that the economic conditions in Myanmar has become stabilized in the first 2023 and GDP is being increased by 3% in the year up to September 2023 which is still 10% lower than in 2019 but higher than in 2021 and 2022. Its current account deficit is expected to widen to almost 6% of GDP in 2023, 3.6% boost up than previous year and the fiscal deficit is estimated to have widened to 5.4% of GDP in 2023. Exchange rate has remained steadily while CPI inflation has become eased. Average Inflation rate is projected to ease to 14% this year up to September 2023. Even though the economic situation is gradually bounding back, the household incomes still remain weak which limit the ability of domestic demand to drive growth. Higher prices and electricity shortages still make it difficult for many businesses to operate feasibly.
One article from New Light of Myanmar newspaper pointed out that the remarkably risen in commodity prices such as foodstuffs and foods amidst 2023 and the majority of dwellers living in Yangon City areas have been trying to overcome daily challenges of hiking prices to cover the cost of their families’ households. The basic breakfast meals such as tea, noodle and Monhinga on the roadside has risen to two times than the previous year. Even, consumption rate of breakfast for the personnel can range between MMK 1,000 to 1,500 per daily. Besides, most of the residents in Yangon city critically face unbalance between income and expense due to rising prices of goods.
2020-2023 Labor Force Report was released by Directorate of Labor, Ministry of Labor in March 2023. The Report was accumulated based on projection method under the great support by Meikhtila University of Economics as there was difficulties to collect data in some areas of countries due to security concerns. The report has not been publicly released yet but sooner or later it will be publicly released through www.mol.gov.mm . According to the findings observed through projection, 90% of the male workers in Myanmar are in the late thirties (30-50) with the highest while 70% of female workers in the late twenties (25-29) with highest among other age groups. It is analyzed that the male workers work until 65 while small amount of female does. 60% of male work until 65 while only 20% of female work until 65. (Reference to “Myanma A Lin” Newspaper, 18th June, 2023.)
Banking and Finance
The United State Government made one-sided economic sanctions on Myanmar two state-owned banks: Myanmar Foreign Trade Bank (MFTB) and Myanma Investment and Commercial Bank (MICB) with the issuance of 20th June, 2023. As the banks do not sign up Foreign Currency Accounts at the US-based banks or branches, there will be neither any losses of currency nor does not make harmful on payment services in International trading. As foreign banking services can be done in almost local private banks and their foreign bank branches apart from those two, public should not be worried about it. In line with rules and regulations adopted by the Foreign Currency Supervisory Committee under Central Bank of Myanmar, the transfer, payment and receiving of foreign currencies, imports and exports, and transfer of employees’ and seafarers’ salaries will continue to be conducted conveniently.
In 2013, the Central Bank of Myanmar implemented a forex market in which interbank transactions can be made between AD banks (Authorized Dealers) and Bank-customer transactions for the Foreign Exchange Market. The system is also supported by International Forex Trading Platform to make the authorized dealers to deliver a complete function for inter-bank transactions. Since 22nd June 2023, the CBM has led the online trading platform for bank-customer transactions and transactions between clients. The total turnover for the trading of the six authorized banks was US$6.89 million with an exchange rate of MMK 2,920 in 2023. Furthermore, the CBM also provided USD SWAP Financing and sold 1.2 million dollars. The CBM also issued that exchange rate transaction on the platforms are the actual value and do not rely on other platforms on social media as they are grey market rates. However market rates are still known as K 3,150 to 3,200 on 29 June 2023.
In line with the Notification issued on 23rd June of CBM, the Monitoring and Steering Committee on Gold and Currency Market under the CBM suppressed on the Foreign Exchange Manipulators, as known as “Illegal Hundi Business Operators”, in Big cities; Yangon and Mandalay because of illegally transferring money without relevant license, also doing Online Gambling businesses and has already been escalated those during June with prosecution under the existing laws. According to the law, Inspection and prosecution against those unscrupulous traders who intend to interfere with the free and fair operation of the market and are involved in illegal foreign currency holding and illegal money transfer businesses will be carried out under the Foreign Exchange Management Law and the related laws.
The launching ceremony of the Aungbarlay Online Lottery System was held at the Myanmar International Convention Centre – II in NayPyiTaw on 8th June, 2023. The sole purpose of upgrading to Online Lottery system is to solve the problem of higher prices of lottery tickets in set price. Online system has many impacts that will allow people to buy within set price, easily through an online lottery application system by using their mobile phones at any times. Not only being easily accessible to buy the tickets not only Payment system can be through the application and small prizes for winning lottery will also be delivered through online or their banking accounts. The system is jointly implemented by relevant ministries and department under the leadership of the Ministry of Finance and Revenue and Myanmar Telecom International Co Ltd.
Trade
In accordance with the new bulletin (9/2023) released by the Trade Department under the Ministry of Commerce, Import licenses can be commenced through Automatic and Non-automatic licensing systems on Myanmar Trade 2.0 platform since 22nd June, 2023. As being digitalized licensing system, import license for certain lines (1,525 lines) through both Sea and Border Trade will be automatically passed on the system. Under Non-automatic licensing system, Seaborne trade and commodities lines which did not require Import licenses are mandatory to import licenses during the licensing process after 60 days initiated since 22nd June, 2023 and will be allowed to be imported within 30 days from 22nd June, 2023. In line with Customer Tariff of Myanmar 2022, there are altogether 3,075 commodities lines with 10 digits HS code were notified to be permitted license automatically on Trade Net 2.0 and since June 22nd, 2023, Only 1,525 lines have already been granted licenses through automatic import licensing system.
In order to promote Border Trading between China and Myanmar and facilitating bilateral currency transaction, the CBM has allowed Myanmar eligible banks to open Renminbi-Myanmar (RBM) accounts for importers and exporters engaged in border trade and it is required to have RBM to do directly border trades in China-Myanmar Border points since 14th June, 2023. The banking transaction for imports in Myanmar-China border trade will start from 1st August 2023. The importers must use the banking system with foreign currency (Yuan) purchased from local banks or export earnings deposited in local bank accounts, the CBM directed. Additionally, companies need to show export earnings or income statements, credit advice or bank statements while seeking a license from the department. The import license will be granted for the amount not exceeding the account balance after screening the bank statement or export earnings or foreign currency purchase records. Importers who have already sought import licenses are required to bring in the goods by 31 August 2023. If they failed to import before the deadline, their import licenses will get cancelled. Regarding export earnings and income statements, the bank deposits put in the account after 1 January 2023 can be used. Exporting companies can use their earnings for imports or transfer them to other entities for import purposes at border checkpoints.
Permits to import New Vehicles from Foreign Countries have been suspended since September 2021. According to Car Importing Polices for 2022, Car sales centers have not been approved to import and at the present, commercial vehicles are allowed only to be imported at a rate of five vehicles per week. In June, 2023, the Customs Department has issued an announcement on the easing of custom duty taxes/rates on imports of domestically semi-knocked down (SKD) and completely knocked-down (CKD) system vehicles. According to the Statement, the tax rate of SKD system passenger cars with above 2000 CC and 2001 CC has been reduced from 7.5 percent to 5 percent while the CKD system passenger cars with above 2000 CC and 2001 CC from 5 percent to 3 percent respectively.
Investment
U.S based Pact Global Microfinance Fund (PGMF), the largest microfinance in Myanmar, announced that the loss of USD 156 Million in debt taken by 890,000 people would be waived and the operating in Myanmar will be closure on June 30, 2023. PGMF has served nearly 15,000 villages in rural areas and 2.3 million clients over 25 years in which 99% of clients are women.
Manufacturing
In order to accelerate the development of Iron and Steel Businesses in Myanmar, the Myanmar Iron and Steel Association (MISA) was opened its office at the 13th Floor of the Union of Myanmar Federation of Chambers of Commerce and Industry (UMFCCI) on 21st June, 2023. MISA has been a cluster of Myanmar Industries Association (MIA) since 2014 and has also joined the South East Asia Iron and Steel Institute (SEAISI) since December 2018. The MISA will move forward to the development of industry standards which are compatible with the country and the production of iron and steel products that meet international standards and cooperate with international organization to promote Small and Medium Steel Enterprises and disseminate iron and steel information and receive technical assistance from the regional countries by holding seminars and research paper reading sessions. Up to today, Myanmar’s steel demand is estimated at 2.5 million ton per year which covers 92 percent of which are being imported and forecasted to grow up to 5.4 million tons per year in 2023.
Energy
Deapin Hydro Power Station I has been operating safely for more than 10 years continuously in Myanmar with the exceeding amount of 10 billion kWh since the beginning of operation. The Power Station is the first hydropower station project invested in and operated by China Datang Corporation in Myanmar, distributing electricity from Bhamo, the second largest city in Kachin State since 2012. Up to recent year, DAPEIN 1 Hydropower Station has already delivered 620 million kWh of free electricity to the Bhamo Area.
Transportation
Kolkata- Bangkok Highway is a trilateral highway connecting Bangkok (Thailand) with Kolkata (India) as part of BIMSTEC (the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation) and is likely to be opened in coming 4 years and. According to the plan, that trilateral highway will start from Bangkok in Thailand across the different cities such as Sukahothai, Mae Sot in Thailand, Yangon, Mandalay, Kalewa and Tamu in Myanmar, Moreh, Kohma, Guwahati, Srirampur, Silguri in India and end in Koltaka (India) with the approximate distance of over 2,800 km. The longest stretch of the highway will be in India and smallest in Thailand. According to the plan, portion of the highway in Thailand has already completed while in Myanmar, be possibly finished in coming three years.
COVID
Currently, new COVID-19 Variants, XBB 1.16 has been spreading around not only in Myanmar but also countries through the world. As of 29th June, 2023, there are 639,740 active cases of COVID-19 in which 97 % have been recovered from the disease and compared to previous month, 1283 cases has been increased. However, the government has been continuously controlling the infection of COVID-19 and the rules and restrictions have been extended until the end of July 2023 by the Ministry of Health.