Myanmar’s economy worsens due to trade deficit

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Mawlamyine, 14 September

Myanmar’s economy is heading in a negative direction due to the continuous increase in the deficit in the trade sector during the more than two and a half years since the military coup, according to economists.

According to the statement of the junta’s Trade Department, the export sector earned more than 16,600 million US dollars in fiscal year 2022-2023, but the import sector received more than 17,300 million dollars, resulting in a trade deficit of more than 700 million dollars.

The trade deficit climbed to more than 780 million US dollars in the four months from April to July of the current fiscal year, about three times higher than the entire previous fiscal year.

The trade deficit is due to the decline in the value of the Myanmar currency, the departure of foreign investment from the country, the exponential increase in the price of imported raw materials, and the war council’s trade restrictions.

“As the trade deficit grows, the country’s economy will take a more negative turn, potentially affecting the import sector,” one economist said.

He added that the previous government managed the trade deficit with foreign investments and income from its citizens abroad, but during the military council period, the outflow of foreign investments and no official remittances from Myanmar workers abroad, making it impossible to replenish the trade deficit.

Business owners said the military council can tighten the import sector because of the trade deficit, and the people may face higher commodity prices again.

On the other hand, the military council restricted some imported goods due to the rising trade deficit while putting pressure on businessmen to produce local products.

Junta chief Senior General Min Aung Hlaing admitted during the economic promotion meeting of the military council on June 30 that there is an increasing need for foreign currency in the trade sector.

Concerning the need for foreign currency, the junta leader blamed international restrictions, an inability to use current foreign currency, and sanctions that prevent sales payments.

The World Bank announced early this year that Myanmar’s deteriorating economy has not yet recovered and that repeated wrong policies will permanently damage the country’s economy.

News – Than Lwin Times

Photo- Min Aung

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