Weekly Business News from Myanmar

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  Consumer Price Index (CPI) reached 144.17 percent in late August which is up 8.18 percent when compared to the same period last year

  Consumer Price Index (CPI) in late August reached 144.17 per cent, up 8.18 per cent compared with the same period last year, according to the report on the CPI and inflation rate issued by the Central Statistical Organization (CSO) at the Ministry of Planning and Finance. According to the calculation using 2012 as the base year, the CPI for the food group hit 156.88 per cent and the non-food group, 126.27 per cent. According to the calculation using 2012 as a base year, the CPI hit 132.42 per cent in May, 2017, 139.51 per cent in late February, 139.11 per cent in late March, 139.82 per cent in late April and 141.13 per cent in late June. In late August, Kayin State saw the biggest change in the CPI with 6.05 per cent. Kayin State faced natural disasters seriously. Commodity prices have gone up due to a decline in the trade flow and high transportation costs, according to the CSO.
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  State owned Myanma Economic Bank (MEB) will lend K250 billion to local small and medium-sized enterprise (SMEs) in the 2018- 2019 fiscal year, in addition to managing JICA's two-step loan for SMEs

  State-owned Myanma Economic Bank (MEB) is planning to lend K250 billion to local small and medium-sized enterprises (SMEs) in 2018-19 fiscal year. The loan does not include loans from the Japan International Cooperation Agency (JICA), said Daw Nilar Wai, Assistant General Manager of MEB (Yangon Office). Earlier this month, JICA said it will lend 11.5 billion Japanese yen (K151.685 billion) to SMEs in 2018-19 through domestic banks. The two-step loan will be managed by MEB under its SME loan programme. The interest rate for the MEB loan will be 9 percent, while JICA’s loan will be carry a lower interest rate of 8.5pc interest, targeting entrepreneurs. Meanwhile, MEB will offer funds to more established SMEs in the manufacturing, production and trading, import substitution, recycling and energy saving as well as services sectors. SMEs that borrow from the MEB must channel at least half the funds into fixed capital and the other half as working capital.
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  Myanmar’s export to foreign countries exceeded USD$7.64 billion in mini-budget period from 1 April to 14 September 2018 which is up $ 1.6 billion when compared to the same period of last fiscal year

  Myanmar’s exports to foreign countries reached US$7.64 billion between 1 April and 14 September of mini-budget period, showing an increase of $1.6 billion compared to last fiscal year, according to the Ministry of Commerce, state media reported. As of mid-September, the figure is up by $1.6 billion compared with $6 billion in the similar period of last year. Of the seven export groups, agriculture and forestry sectors showed a decline in exports, while exports of livestock, fishery, minerals, finished industrial goods and other export groups increased. Export values were registered at $1.9 billion for agro products, $160 million for livestock, $266 million for fishery products, $879 million for minerals, $86.3 million for forestry products, $4 billion for manufactured goods and $1 billion for other goods.
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  Business communities are pointing out the lack of government authority’s management on Kyat depreciation while the Myanmar government blames it on currency manipulation and trade war between US and China

  YANGON—While Myanmar’s government has blamed currency manipulation and the trade war between the United States and China for the record depreciation of the kyat against US dollar, business circles are pointing out the Myanmar government’s mismanagement and the Central Bank of Myanmar’s poor performance. The kyat-dollar exchange rate has increased steeply from 1,344 kyats per US dollar on June 1 this year to over 1,600 kyats per US dollar in the third week of September. “There are only a few big players in the market who trade US dollars. In the past, the exchange rates would be stable once the government controlled them. But [the current government] won’t do that. It doesn’t want to do that. So we are tracking money transactions now,” the President’s Office spokesperson U Zaw Htay told reporters in Naypyitaw on Friday. The government is doing an investigation and will then take appropriate action, said U Zaw Htay.
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  Union Minister for Transport and Communications held talks with Chief Executive Officers from Seoul Metro to discuss cooperation on metro train services in Myanmar

  Union Minister for Transport and Communications U Thant Sin Maung held talks with Mr. Kim Tae Ho, Chief Executive Officer of Seoul Metro, at the company’s head office in Seoul, the Republic of Korea, on 18 September over metro train services. At the meeting, they sought prospects for cooperation in metro train services between Myanma Railways (MR) and Seoul Metro. The Union Minister visited the state-run KORAIL Company in Daejeon and met with Senior Vice President of KORAIL Mr. Chung In-Soo.
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  Gold export and import One Stop Service Centre (OSSC) was opened at Culture Valley in Yangon to integrate Myanmar into the world gold market through gold trading

  Gold export and import One Stop Service Center (OSSC) is opened on Monday at Culture Valley in Yangon in the presence of Yangon Region Chief Minister. The One Stop Service Center aims to enable Myanmar to integrate into the world gold market through exporting and importing of gold, to increase foreign direct investment in the gold, gem and jewelry industry as well as to increase incomes of the nations through its communities and industries. Chairman, Myanmar Gold Entrepreneur Association, Kyaw Win said “The main objective of opening one stop service center (OSSC) is to create a gold market both locally and globally legally by setting the import and export center for gold, gems and jewelry. So, the center will provide all the services for exporting and importing processes also for gold related value added products. Exporters and importers can get the services here in one day.”
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  Despite the rising foreign exchange rate, five sectors have potential to outperform the rest of the economy in 2018- 2019: banking, oil and gas, retail, education, and garments

  Myanmar’s economy has taken a beating in recent quarters, with a rising number of companies reporting tougher business conditions and a slowdown in market demand. One of the main reasons is the rising foreign exchange rate. Despite a slew of measures taken by the Central Bank, which included pumping millions of dollars from its reserves into the economy and a removal of the +/- 0.8pc exchange rate trading brand in August, the dollar has risen by around 10 percent against the Myanmar kyat since May. That has affected businesses and households across the country, a major importer of goods like petrol, food, cosmetics, electronics and building materials. According to a recent survey by the Union of Myanmar Federation Chamber of Commerce and Industry (UMFCCI), the key challenge for the economy in the second quarter was mainly volatile exchange rates.
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  The National Planning Law expects the highest growth rate in Myanmar’s telecommunications, industrial and financial sectors

  YANGON—Amid a slowing economy and complaints from the business community, Myanmar’s parliament has approved a National Planning Law for the 2018-2019 fiscal year which expects to see the highest growth rate in the country’s telecommunications, industrial and financial sectors. On Wednesday, President U Win Myint signed the bill with the approval of the Union Parliament and it is to be effective from October 1 this year to September 30, 2019. According to the National Planning Law, the government expects to increase the growth of GDP from 6.8 percent to 7.6 percent, while the telecommunications sector is projected to grow by 15 percent, the industrial sector by 11.2 percent and the financial sector by 9 percent in the coming fiscal year. The law states that the government will make efforts to improve the trade sector by 7.7 percent, the mineral sector by 7.5 percent and the social management sector by 7.3 percent.
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  Shwe YeHtun-2, an appraisal well in offshore block A-6 was tested to produce natural gas, and has 100 percent success with five gas discoveries achieved in five wells

  Appraisal well Shwe Yee Htun-2 has been successfully drilled with formation evaluation results indicating a gas column and net pay thickness that substantially exceeds prior expectations, according to MRPL E&P. The domestic oil and gas firm said this equates to a track record amounting to 100-percent success with five gas discoveries achieved in five wells drilled in Myanmar offshore Block A-6. The Shwe Yee Htun-2, an appraisal well in offshore block A-6, was tested to be able to produce natural gas, according to an official announcement from the Ministry of Electricity and Energy on September 22. The well located at about 102 kilometres northwest of Pathein, Ayeyarwady Region, was spudded-in on July 20, 2018 by Dhriubhai Deep Water KG2 (DDKG2) rig.
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  Manufacturing sector attracts foreign direct investment of USD $ 496 million from 47 foreign projects in past five months

  The manufacturing sector attracts foreign direct investments of US$496.6 million through 47 projects from April to August, according to statistics provided by the Directorate of Investment and Company Administration. In the past five months, FDIs worth $1.3 billion, including expansion of investments, were brought into the country. MIC has allowed 65 enterprises to invest in the country. The agriculture sector attracted two foreign investment with a capital of $10.6 million while two projects worth $18.38 million enters livestock and fisheries sector. The real estate sector also received investments worth $195.5 million from three projects. Similarly, the hotels and tourism sector attained FDI of $9.53 million from two project. Over $267.9 million FDIs were pumped into other service sector.