Myanmar's garment exports could reach up to US$3bn this year, new estimates show, boosted by an increase in investment and orders, particularly from Europe.

Figures from the Myanmar Garment Entrepreneurs' Association show export earnings from cutting, making, and packaging clothing beat estimates of $2bn last year to hit $2.2bn.

During the first three months of this fiscal year, export earnings from the sector generated nearly $493.5m, up $288.5m from the same period last year. As such, full-year exports are expected to reach $3bn.

The Myanmar Investment Commission is understood to have approved numerous applications for investment and orders, according to the Directorate of Investment and Company Administration. And it is Europe that appears to be boosting the numbers. According to the Association, every month around four to six companies from the European Union invest in Myanmar's garment industry. It has now overtaken Japan as the country's biggest market.

Indeed, Myanmar exported some $2.15bn worth of garments to the world across HS61 (knitted) and HS62 (woven) product categories in 2016, of which $961m – 45% – went to the EU, according to the UN International Trade Statistics Database. Japan, which until last year had been the largest buyer, accounted for 31% of Myanmar's garment exports and South Korea 16%.

The trend is driven almost entirely by larger appetite from the EU rather than weaker Japanese demand. The EU reinstated Myanmar's Generalised Scheme of Preferences (GSP) status back in 2013, and higher costs in other garment exporting nations have also helped make Myanmar more appealing.

Clothing is Myanmar's third largest export, accounting for around 16%, behind agricultural goods (27%) and natural gas (23%).

EU overtakes Japan as Myanmar's largest apparel market