RANGOON — With figures topping US$5 billion, a widening trade deficit is likely to greet Burma’s new government on April 1, says the Ministry of Commerce.
According to the ministry, the total trade volume reached $25.7 billion between April 2015 and March of this year. Import volume hovered around $15.5 billion, while export volume reached only $10.2 billion. The fiscal year ends on March 31, and President-elect Htin Kyaw of the National League for Democracy (NLD) is due to be sworn in April 1.
The total trade figure through the first 11 months of the current fiscal year falls short of the government’s expectation of $30 billion.
“Our import volume has significantly increased due to the many projects that have needed infrastructure materials this year, and our export volume has declined because of less oil and gas earnings this year coupled with flooding last year that damaged agricultural products,” Maung Aung, a senior economist at the Ministry of Commerce, told The Irrawaddy.
Oil and gas, jade and agriculture products are Burma’s major export items, while investment and raw industrial materials and home appliances are its chief imports.
“The Myanmar Investment Commission approved many projects last year, such as the many factories in the Thilawa SEZ [special economic zone]. Investment materials [for the projects] accounted for at least 60 percent of the total import volume,” Maung Aung said, adding that total trade volume was likely to reach only $26-$27 billion this fiscal year.
Burma’s total trade volume has increased each year since the former pariah state transitioned to a quasi-civilian government in 2011. In the last year of outgoing President Thein Sein’s term, however, this figure looks to have leveled off, a trend that has some observers concerned.
Aye Lwin, a central executive member of the Union of Myanmar Federation of Chambers of Commerce and Industry (UMFCCI), told The Irrawaddy it was not a good sign for the new government, describing a trade deficit of $5 billion as being hazardous to trade prospects.
“This amount is at a dangerous level. If the new government can’t get a handle on the issue, then it will have to rethink its trade policy and how to promote exports,” Aye Lwin said, though he added some skepticism, doubting the veracity of government trade data.
Burma imported some $16 billion in goods in the 2014-15 fiscal year, and exports totaled more than $11 billion, leaving a deficit of $4.9 billion, according to ministry estimates.