FDI in Myanmar continues post-coup plunge, drops 60%

Foreign direct investment (FDI) in Myanmar fell by more than 60% year on year between April 1 and July 31 to about $467 million, according to figures released by the Directorate of Investment and Company Administration (DICA).

FDI in Myanmar totaled $1.22 billion in the same period last year, according to DICA.

Almost all the FDI in the four-month period came from Singapore and China—slightly more than $335 million and about $124 million, respectively. Other sources of FDI during the April-July period included Taiwan, Hong Kong SAR, India, Korea, Samoa, the UK, and the United States (listed in order of amount).

More than $317 million of the FDI during the four-month period went into the electricity sector, $77 million went into the transport and telecom sectors, and over $48 million went into manufacturing, DICA said.

FDI also plunged 60% in the first quarter of this year, compared to the same quarter in 2022. In the first quarter of 2023, FDI totaled $178 million compared to $402 million in the first quarter of 2022, which also saw a dramatic year-on-year decline. FDI totaled $908 million in the first quarter of 2021.

The World Bank said in its Myanmar Economic Monitor for this year that although Myanmar showed signs of a pick-up in domestic investment in the second half of 2022, foreign investment remained weak. It tentatively forecast that GDP might expand 3% this year, but said the country’s overall GDP would still be 13 percentage points less than it was in 2019.

This April, the first month of the junta’s 2023-24 fiscal year, Myanmar received only one FDI project, worth $ 3.7 million, in the manufacturing sector.

Foreign investors are not only shunning the country due to the political instability, economists say. The junta’s mismanagement of the financial sector and poor infrastructure, including a desperately insufficient supply of electricity, are also deterring FDI, economists say.