Trade deficit expected to widen in 2019-20 FY

Trade deficit expected to widen in 2019-20 FY
Thilawa Special Economic Zone. (Photo-Kyi Naing)
Thilawa Special Economic Zone. (Photo-Kyi Naing)
Published 26 December 2019

 

Due to the increase in imports of capital goods and raw materials for the construction and transport sector, the trade deficit is projected to widen more than expected, in 2019-2020 fiscal year, according to the 2019-2020 Budget.

The construction sector covers the construction of expressway in Yangon, upgrading of Thandwe airport, construction and upgrading of roads linking to other countries, union roads, district-to-district roads and rural roads, development of low-cost and affordable housing projects and public rental housing projects.

The country’s economic growth rate is expected to hit seven per cent. The industrial sector is estimated to see the biggest growth.

The growth rate in the farm sector is estimated to hit 2.5 per cent, 8.6 per cent in the industry sector and 8.1 per cent in services sector.

The farm sector is projected to increase exports in addition to local consumption, produce marketable high-yield seeds step by step, extend fish and prawn breeding industries and promote technology.

The industry sector is estimated to manufacture Toyota, increase the productivity of garment and small industries, produce high-quality products through a joint venture between the government and private and increase off-shore natural gas production.

The services sector is expected to see the development in transport, communications, monetary services and trade.

The country’s economic growth rate is expected to hit seven per cent thanks to the four points—more influx of foreign direct investments due to the new Companies Investment Law, the implementation of projects included in China-Myanmar Economic Corridor, better prospects for local transport and travel and tours and other services.

Like other countries, Myanmar may suffer the consequences of slow global economic growth. It may have an impact on trade and investments.

Local fuel prices have soared due to rising global crude oil price, resulting in an increase in production costs and a decline in purchasing power.

According to the budgeted trade value calculated on Ks 1,525 per dollar, the export value is projected to hit 15,500 million US dollars and the import value, 17,500 million US dollars. There will be a trade deficit of 2,000 million US dollars in 2019-20 FY.