Photo credit: The Myanmar Times
Economy, Investment and Trade
Asian Development Bank (ADB) expects further economic growth for Myanmar in 2017-2018 FY
(12 April 2018) Myanmar economy is on target for further growth in 2017-2018 fiscal year (FY) if the country manages its public finances cleverly and allows a stable flow of foreign direct investments (FDI). According to the Asian Development Bank (ADB), growth forecasts for the country is expected to hit 6.8 percent in 2017-18 compared to 5.9 percent during the previous FY. Growth will be driven by improvements in the agriculture, industry and tourism sector. ADB added that growth is expected to continue at current levels in 2018-19 before hitting 7.2 percent in 2019-2020. ADB also noted that government expenditure increased as the fiscal deficit has increased rapidly to around 3.5 percent of GDP from 2.5 perfect before due to higher spending on infrastructure and social services. Despite the fact that there is more robust growth and spending, Myanmar’s inflation slowed to estimated 5.3 percent in 2017-2018 from 6.8 percent in the previous year. However, ADB predicted that inflation will likely rise to 6.2 percent in 2018-19 before dropping to 6 percent in 2019-20 on the back of stronger growth, additional government spending and oil prices trending up.
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Myanmar’s insurance industry looks set for reform
(12 April 2018) Myanmar government is looking to liberalise the insurance sector by enabling global insurance providers to tap into the country’s insurance market. According to State-owned Myanma Insurance, the country insurance penetration stands at just 0.07 percent of the GDP showing that the insurance market in the country is hugely untapped. According to the Central Bank of Myanmar, total gross written premiums (GWP) amounted to approximately US$25.5 million (K33.9 billion) in the first quarter of 2017, with Myanmar Insurance accounting for 45.5 percent of the total. Currently, there are 12 private insurance firms with licenses to operate in Myanmar. While private insurers are still restricted with as to what services they can render, foreign insurers are unable to conduct business. Once foreign insurance companies are allowed to penetrate into Myanmar’s market, the government will focus on the sustainability of local players by providing opportunities for local companies to work with global insurance firms.
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Economic zone in the works for China and Myanmar
(19 April 2018) The Department of Trade under Myanmar’s Ministry of Commerce have confirmed that negotiations are underway between Myanmar and China for the construction of a Chinese Economic Zone to promote the Myanmar’s manufacturing and tourism sector. In 2017, both countries signed a memorandum of understanding (MoU) to develop the zone and are currently identifying potential locations in China before discussing how and when to implement the project. The new economic zone will differ from the Muse border trade gate in Myanmar. The new zone will offer a larger scope for bilateral trade cooperation including plans to invest in factories and mills and develop tourism sector. The economic zone is also expected to help reduce the country’s gaping trade deficit. In 2017-18, Myanmar registered a trade deficit of US$3.8 billion. During the year, the total volume of foreign trade amounted to US$33.3 billion.
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Myanmar government eyes rail to reduce logistics costs
(18 April 2018) Myanmar government is looking to switch to rail to reduce the country’s increasing logistic costs. Over the years, the country has relied on vehicles for logistics and never utilised the railroads even though there are major railroad systems around the country. Myanmar had 4720 kilometres of rail lines in 2015-2016 FY and increased by 11.2 kilometres in 2016-2017 FY. According to the country’s Planning and Finance Ministry, trains transported 1.98 million tonnes of cargo in 2015-2016 FY and 1.75 million tonnes in 2016-2017 FY. The ministry also noted that the number of passengers increased from 42.05 million in 2015-2016 FY to 42.32 million in 2016-2017 FY.
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Myanmar’s largest Trade Union opens women workers’ centre to empower female workers
(17 April 2018) The Confederation of Trade Unions in Myanmar (CTUM) has opened a women workers’ centre in Hlaing Thair Yar township of Yangon region to assist women in generating income to support their families. This is in line with union’s bid to reduce the country’s poverty rate, which is at 37.5 percent. The centre opens daily to provide women workers with essential knowledge to improve work productivity. The centre is free of charge for all women, with 24-hour hotline support and pre-arranged legal counselling services. CTUM was established in July 2015, representing 745 registered trade unions in nine different sectors, and has a membership of over 65,000 workers in Myanmar.
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