Myanmar Economic Monitor, October 2013
- The economy grew at 6.5% in 2012/13, due to an increase in gas production, services, construction, and strong commodity exports.
- Inflation has been on the rise in recent months, reaching 7.3% in August 2013.
- The budget deficit declined to 3.7% of the GDP in 2012/13, from 4.6% in 2011/12.
- The 2013/14 budget provides for increased spending on social sectors. However, the defense budget remains high.
Myanmar continues to improve its business environment and there are reforms underway.
- The requirement for import and export license was removed from 600 products.
- Parliament approved new foreign investment regulations.
- Myanmar is in the process of preparing consumer protection and competition laws.
- Parliament passed the Central Bank of Myanmar Law on July 11, 2013. The law provides for a more autonomous Central Bank.
- A Securities Exchange Law was passed. Procedures are also underway to amend the Financial Institutions Law and to prepare rules and regulations to govern joint ventures in the banking sector.
- Restrictions have been removed on trading in foreign exchange among local private banks.
- Insurance licenses have been issued to private providers for the first time in 50 years.
- Myanmar is preparing a mining law.
- A new Anti-Corruption Law was enacted on September 17, 2013, replacing the 1948 Suppression of Corruption Act.
Special Feature: Myanmar Public Expenditure and Financial Accountability Assessment (PEFA)
A PEFA for Myanmar was completed, providing the first-ever comprehensive review of public financial management systems in the country. While the current public financial management system is strong, there are also many areas for improvement, as is to be expected in a country at a development stage of Myanmar.
- The report finds that the manual ledger system is largely up to date and data quality is good.
- Budgeting and planning institutions are well established and undergoing significant change as the country goes through the economic and social reform program.
- Myanmar has a simple, unified budget classification system that is able to report on actual expenditures properly.
Some recommended areas for improvement
- Myanmar issues revised or supplemental budgets mid-year. This leads to significant differences between budgeted and actual spending.
- Spending bodies have a reasonable degree of predictability about the resources available to them. However, budget execution control in financial management and procurement are varied across ministries.
- While reporting on spending happens monthly and at the end of the fiscal year, it is usually not completed in a timely fashion because of outdated manual systems.