Trade deficit keeps widening
Play
Trade deficit continues its pace in the period between April 1 and May 9, according to a report from the Ministry of Commerce.
In the period, while Myanmar reaped only US$560 million from exports, the import value was nearly three folds higher at $1.48 billion, according to the report. This left the trade deficit at $920 million.
Compared to the same period last year, trade volume increased by $180 million to $2.4 billion. Comparatively, while export value decreased by $170 million year on year, import value rose by $355 million.
In the fiscal year 2013-14, ending March 2014, Myanmar showed $25 billion in trade value, up largely from $18 billion a year earlier. With $11.1 billion from exports and $13.75 billion from imports, the economy locked in $2.65 billion in trade deficit in the year – a new record high.
The statistics show a several-time increase of the trade deficit since 2012-13, which was just over $91 million.
Due to the widening deficits, the Ministry of Commerce recently launched the MyanTrade, a new organisation with the stated goal of enhancing Myanmar’s burgeoning export sector.
The ministry is currently drafting the Value-added Exports Law to develop exports and create job opportunities. Similarly, the Anti-Dumping Law and Safe-Guard Law are being drawn up to protect the rights of local proprietors.
Oil and natural gas dominate Myanmar's exports. Other exports include vegetables, wood, fish, clothing, rubber and fruits. Myanmar mainly imports fuel, vegetable oil, vehicles, pharmaceutical products, construction equipment, polymers, tires and machinery, mainly from neighbouring countries.
In 2012, China was the top trading partner of the country, exporting products worth $4.86 billion to Myanmar and importing products worth $919 million. In the year, Myanmar reaped the highest export income through trade with Thailand, $2.62 billion. Imports from Thailand were valued at $2.66 billion.
Growing demand for imports in light of the economic reopening and the weakening kyat has worsened the country's trade deficit. As of May 14, a US dollar fetched Ks 965, a sharp compared to below Ks 7 in 2012 before the Central Bank of Myanmar implemented the managed float in the year.
Economists believed that while the widening deficit will further weaken the kyat in the short term, foreign investment, development aid and remittances should more than support the balance of payments and the kyat. In the long-term, however, export revenue is expected to rise, supported by new gas fields and rising global trade.
