The Union Government is preparing to speed up reforms in the monetary sector after Myanmar experienced some instability with its currency.
President U Htin Kyaw made his remarks at the finance commission meeting held at the meeting hall of the President’s House yesterday to revise budget estimates submitted by regions and states for the 2016-2017 fiscal year.
“Myanmar experienced instability of foreign exchange rates in answer to the impact on all foreign currencies depending on the rising dollar value,” said President U Htin Kyaw. “Inflation is found to be caused by consecutive deficits and imbalanced demand and supply. The nation is preparing to accelerate reforms in monetary sector”.
He also disclosed that the government is planning to seek more subventions, or grants of money for the country’s small and medium industries and to build national industries, calling for frugally and systematically spending money in times of slow global economies.
When the new government took control earlier this year, budget estimates for the 2016-2017 financial year and the Law on Union Budget were amended at the 2nd Pyidaungsu Hluttaw, as the Union’s ministries were reformed.
Speaking at the meeting yesterday, the president urged the finance commission to submit laws on allotment of the revised budget to the 3rd regular session of 2nd Pyidaungsu Hluttaw.
Due to the revised budget, respective ministries have to wait to spend their budget, which affects inland market to some extent, the president said.
He also disclosed that the IMF urged the government to make necessary reforms because of the slow growth of the global economy.
As a consequence, progress in the trade sector of Myanmar is slowing and, according to the estimate released by the IMF, Asian countries are continuing to stand at favourable levels in progress, he added.
“At the same time, we need to speed up reforms in the economic sector. As per the current situation of the State’s macroeconomy, the nation’s GDP may be lower than expected,” said the president.
That was attributed to a decline in produce in the agricultural sector due to natural disasters, reduced wood production in the forestry sector, a shortage of income in the oil and petroleum sector due to decreasing oil prices worldwide and a reduction in the mining of minerals to lessen the effects on the environment.
“Following the State Counsellor’s state visit to the United States, economic sanctions were lifted (and) co-incidentally at the time of promulgation of new investment law. To promote economic development, 12 economic principles were laid down and prioritised policies on investment were issued.
Now the process for achieving political stability, national reconciliation and Union peace are on the right path. After the transfer of power from the old regime to the new government, we are now building new administrative machinery. This year, governmental departments need to frugally spend their budgets and to find more revenue. Draft law on revised budget estimates for the fiscal year 2016-2017 to be submitted by Union Minister for Finance, the secretary to the finance commission, is to be discussed and approved” the president said.
Afterwards, Vice President U Myint Swe said: “According to the budget management during the first 6-month period, some ministries and organisations got a revenue of Ks173.509 billion more than expected, with some spending Ks910.990 billion more than the originally expected amount. Out of Ks2121.779 billion demanded by Union level organisations as a refilled budget, Ks1354.614 billion was allotted. In terms of revenue, the revised estimate is Ks17152.500 billion, and the revised budget expenditure was Ks21177.614 billion, thus the revised estimate expenditure deficit is Ks4025.130 billion. Ratio of deficit and GDP is 4.97. Therefore draft law on revised budget estimate for the year 2016-2017 which has been assessed by the finance commission needs to be approved”.
Vice President U Henry Van Thio, Union Minister U Kyaw Win, Chairman of Nay Pyi Taw Council and region and state chief ministers also gave their opinions. In his closing address, President U Htin Kyaw urged the governmental organisations to undertake responsibility and accountability, as there is growing concern about the national economy. He also said the current situation requires the departments to systematically spend the country’s finance in accord with rules and regulations set by internal audits and Union Auditor-General offices.—Myanmar News Agency