Myanmar Faces Double Digit Inflation and Danger in China Slowdown
Myanmar’s inflation is forecast to rise into double figures in the near future, pushed by food price and wage increases.
“We expect inflationary pressures to increase, mainly coming from the latest depreciation episode in July as well as the recent effects of massive flooding made worse by Cyclone Komen, before moderating towards 8% in the medium-term,” financial analysts Mantis said in their latest study of Myanmar’s economy.
Foreign direct investment (FDI) is expected to remain strong and continue propelling growth averaging 7.5% a year, the Dutch analysts said in their September forecast made available to Mizzima.
“We expect investment to remain strong in the underserviced finance and telecom sectors, relatively low wage costs to continue to attract attention towards garment manufacturing, while growing internal demand will propel the electricity generation sector,” Mantis said.
However, FDI could be slowed by two factors: the outcome of the November elections and China’s economic slowdown. FDI would be stunted if the democratic process is slowed and reforms stall, Mantis said. “[China] is a major source of financing for both the private and public sector and Myanmar’s main trade partner [and] a significant further slowdown in Chinese growth will hit both potential output and the exchange rate.”
Myanmar Sea Borders Tension Free but Oil Price Future Gloomy: Study
An international survey of oil and gas exploration concludes that the Bay of Bengal is now free of territorial disputes.
The Bay, where much of Myanmar’s potential reserves are believed to lie, was the subject of confrontation in the past with neighbor Bangladesh. It now fails to make a top ten list of the world’s hydrocarbon border flashpoints compiled by analysts Business Monitor International (BMI).
However, the study forecasts that crude oil prices will remain low until 2020 and possibly beyond, suggesting that Brent crude might still be less than US$80 per barrel even in 2024.
A continuing glut will make exploration and production in many areas, especially offshore deep-water blocks, economically unfeasible, BMI said.
Myanmar has just finalised production sharing contracts for 20 blocks in the Bay of Bengal and Andaman Sea, ten of which are in deep water.
International Hotel Group to Manage 260-Room Yangon Project
The world’s biggest hotel management organisation, Wyndham Hotel Group, is to run a 260-room hotel planned for the Kantharyar Centre Project beside Yangon’s Kandawgyi Lake.
The five-star Wyndham Grand Yangon Royal Lake is to be part of the US$157 million multiple use Kantharyar Centre which will include apartments, an office tower and shops.
The hotel, expected to be completed in 2017, will be owned by Asia Myanmar Shining Star Company but managed by Wyndham, Myanmar Business Today said.
Asia Myanmar Shining Star Company is a Hong Kong based business.
The Wyndham Group includes hotel brands Ramada, Days Inn, Microtel Inn & Suites and Travelodge.
“We will invest around US$70 million in the hotel. The ground work for Phase 1 of the development is complete and we anticipate the whole project will be finalized by 2017,” said Asia Myanmar Shining Star Company spokesman Kyaw Khaing.
Myanmar handled 3 million visitors in 2014 and the number is rising annually. Inadequate accommodation for both 5-star businesspeople and backpackers continues to be a problem, travel trade magazine TTR Weekly has said.
No Early Yangon Traffic Solution but Aid for Mekong Corridor Road
Yangon’s worsening traffic problems cannot be solved in the near future because a proposed comprehensive traffic improvement program would be too expensive, Yangon City Development Committee said.
Surveys and proposals to improve traffic flow have been made by the Japan International Cooperation Agency (JICA), funded by the Tokyo government.
A European Union-funded study is under way at present. The EU’s Sustainable Urban Mobility Planning is costing almost US$1 million and will not be completed until January 2017, various reports said.
“It is impossible to implement the [JICA] project immediately due to financial and other difficulties. JICA has estimated that the project would cost about US$24 billion. We will start implementing parts of the project, but not as originally planned,” Eleven Media quoted the Yangon development committee saying this week.
Meanwhile, the Ministry of Construction said it is obtaining financial help from the Asian Development Bank (ADB) towards the cost improving some of Myanmar’s trunk roads along the so-called Greater Mekong Subregion East West Economic Corridor promoted by the bank.
The ministry said in a notice this week it is inviting bids for a contract to improve a stretch of road in the Eindu-Kawkereik area as part of the corridor. The work will be funded jointly by the SADB and the ASEAN Infrastructure Fund, said the ministry.
Construction and supply businesses interested in bidding should contact the project director at email@example.com. The deadline for bids is December 8.
National Airline gets Global Exposure in new Booking Service
Myanmar National Airlines has gone international, with its promotional operations at least.
The airline, which has just begun its first overseas service, has signed a comprehensive distribution agreement with global technology provider Sabre Corporation which will ensure the flag carrier’s fares and schedules are available to over 100,000 travel agents across the Asia Pacific region.
Until now the airline’s domestic services could not be booked through an international system, said travel trade magazine TTR Weekly.
“Myanmar has become a strategic growth market in Southeast Asia for both tourism and trade,” TTR Weekly said. “This agreement with Myanmar National Airlines provides travel agents across the region with access to the full domestic network.”
In an overseas first, Myanmar National has begun flights to and from Singapore.
Meanwhile, some land cross-border travel between Myanmar and Thailand has been restricted in the past few days for security reasons, TTR Weekly said.
Restrictions were reportedly imposed on visa-free entry into Thailand from the Phu Nam Ron-Htee Khee border crossing at Kanchanaburi.
The Thai authorities also imposed restrictions on a number of border land border crossings with Cambodia, the trade magazine said.
It said it believed the restrictions were linked with investigations into the bombing at a shrine in Bangkok on August 17.