In this year, Myanmar trade could be affected by the slowdown in China, the fall in world prices of raw materials and the devastating floods across the country, experts say.
China is a major trading partner of Myanmar – the second largest bilateral trade with the world economy accounts for over 50 percent of total trade, according to Ministry of Commerce data.
Changyong Rhee, director of the Department of Asia and the Pacific at the International Monetary Fund (IMF), said that growth will moderate through the ASEAN in 2015 to 4.6pc, up slightly to 5.0pc in 2016.
Low prices of raw materials have hit regional exporters such as Indonesia, Malaysia and Myanmar, he said.
The World Bank last week cut its economic growth forecast for 2016 from 8.2pc to 6.5pc Myanmar.
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Regional export-oriented economies will be influenced by expectations of tighter conditions in global financial markets, Mr. Rhee said at a press conference in the Asia and the Pacific last week on the occasion of the annual meetings of the IMF and World Bank Lima, Peru.
Hoe Ee Khor, deputy director of the Asia-Pacific Department of the International Monetary Fund, said that the impact of China’s economic transition in Myanmar will be similar to its impact on other countries producing raw materials. Myanmar exports of oil and gas, rice and other agricultural products in China.
“Due to the falling prices of raw materials, export earnings are falling,” said, after the press conference.
“Another factor is that exports of rice are needed in the national economy of Myanmar.”
Floods across the country in July and August flooded about 1.5 million acres of rice – the destruction of more than 500,000 acres. Myanmar Rice Federation imposed a ban of 45 days for exports to meet domestic demand and keep prices down.
The total volume of trading in this fiscal year reached about US $ 13.4 billion. The exports were worth $ 5.5 billion and imports about $ 7.9 billion until mid-October, said U Win Myint, Director of the Department of Commerce Trade Promotion.
Bilateral trade has decreased $ 850 million compared to the same period last year, he said. “We are investigating why it fell – logistics, the banking system, the output of the exchange rate or production,” he said.
The kyat has fallen around 25pc against the dollar this year for K1285 yesterday, according to the reference rate of the Central Bank of Myanmar.
Sales target of government for this year is $ 29.9 billion – that can be reached, said U Win Myint.
Beans and legumes provision of Myanmar has almost dried up, due to strong demand from India, with about $ 350 million received so far this year, he said.
Exports of natural gas is unlikely to fall, he said. Supported by demand from China and Thailand, which have earned the country $ 2.5 billion this year from mid-October.
While rice exports have been reduced, this is due to floods and the impact of the economic slowdown in China, he said. Rice exports are worth almost $ 180 million this year to date.
“We hope that the external changes will not have a negative impact on our country. The farmers and exporters will benefit from a weaker currency,” he said.
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“We also hope that the situation will improve next year, when exporters are able to access the EU market.”
Officials have previously said they expected exports of rice to fall to between 1.5 and 2 million tons this year.