YANGON—Business activity in Myanmar has slowed significantly since the country confirmed its first case of COVID-19 in late March. Where possible, most businesses are now letting employees work from home to prevent the spread of the disease.
As of Thursday afternoon, Myanmar had confirmed 22 COVID-19 cases, including three deaths.
Yangon, the country’s commercial hub, will observe a strict 10-day “stay home” period from Friday through April 19. Those involved in COVID-19 prevention, control and treatment activities are exempt.
Despite the COVID-19 outbreak, the Myanmar Investment Commission (MIC) approved new investments in the industrial, construction and service sectors.
Meanwhile, the Ministry of Commerce has reduced the license fee for import businesses by nearly half as part of its effort to cushion the impact of the global pandemic, and has temporarily suspended issuance of rice export permits to maintain market stability and domestic rice sufficiency during the outbreak.
Moreover, in its latest outlook, the Asian Development Bank (ADB) said Myanmar’s GDP growth will likely slow significantly due to the pandemic.
MIC approves new investments
Despite the slowdown in business activity due to COVID-19 in the country, the Myanmar Investment Commission (MIC) announced on Tuesday that so far in fiscal 2019-20 (from Oct. 1 to April 3) it had approved more than US$3.36 billion (about 4.8 trillion kyats) worth of investment projects.
Of that amount, the MIC said it approved US$555 million and 51 billion kyats worth of foreign and local investment proposals, respectively, last Friday.
U Thant Sin Lwin, the secretary of the MIC and director-general of the government investment agency, the Directorate of Investment and Company Administration (DICA), said the new investments will create job opportunities for more than 3,000 people in the country, mostly in the industrial, construction and service sectors.
He said the country has set a foreign direct investment (FDI) target of US$5.8 billion for the current fiscal year, which ends on Sept. 30. As the extent of the impact of COVID-19 remains unclear, however, the MIC cannot yet say whether the target is likely to be met, he said.
DICA said a total of 154 foreign enterprises have received the green light from the MIC during this fiscal year, mostly focused on the electricity, manufacturing, agriculture, livestock and fishery, transport and communications, real estate development, hotels and tourism, and services sectors.
Rice export permits suspended
Myanmar’s Ministry of Commerce has temporarily stopped issuing rice export permits in the wake of price increases due to the COVID-19 outbreak.
The ministry said the rice price has increased gradually since the country confirmed its first COVID-19 cases. It has suspended export permits to maintain market stability and domestic rice sufficiency during the COVID-19 outbreak.
The ministry said it would use the suspension period to make improvements in its procedures for issuing licenses.
Myanmar exports rice mainly to countries in Asia, Africa and Europe. The country exported a total of 23 million tons in the previous fiscal year, 2018-19.
Import license fee cut due to COVID-19
The Ministry of Commerce on Wednesday reduced by nearly half the license fee for import businesses as a part of its effort to cushion the impact of the global pandemic on the country’s economy.
The ministry said it reduced the fee to 30,000 kyats from 50,000 kyats until the end of the current fiscal year on Sept. 30.
Last week, the ministry opened an online portal for import and export permits as part of efforts to implement social distancing. The ministry said essential products such as food, pharmaceuticals, medical supplies for hospitals and fuel are included in a list available online.
GDP to slow significantly: ABD
In its latest outlook for Myanmar’s economy, the Asian Development Bank said that due to COVID-19, GDP growth will likely slow significantly to 4.2 percent this fiscal year from 6.8 percent in FY2018-19, which ended on Sept. 30, 2019.
The new growth forecast for FY2019-20 is down by 2.6 percentage points from the 6.8 percent projection the ADB announced in September last year.
The bank said if the coronavirus outbreak is confined quickly, growth could recover to 6.8 percent in FY2020-21. The lowered growth estimate for FY2020 reflects the severity of COVID-19’s impact on the global, regional and local economies, it said.
Inflation is forecast to ease slightly over the next two years, the bank added.
Myanmar’s fiscal deficit is expected to widen to 5.2 percent this fiscal year, mainly to accommodate proposed increases in spending on public services such as education, health care and social protection, as well as continued building to fill infrastructure deficits, according to bank.
Growth in agriculture will decelerate to 1.3 percent in the current fiscal year, reflecting the potential negative impact of COVID-19 on exports of some primary products, the ADB said.
The outlook for industry remains positive, however, with growth expected to pick up to 8.7 percent in FY2021. A lower growth rate of 4.5 percent is expected for services in FY2020 as the COVID-19 pandemic could have a dramatic impact on tourism at its peak during the dry season, which lasts through May, the ADB said.
It said FDI inflows are expected to regain momentum in FY2020, supported by the opening of the finance industry to FDI, gradual reform of the tax and legal systems, improved electricity supply and other infrastructure, and a more conducive business and investment climate.
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