GDP growth expected at 7pc, deficit at 5.9pc for next fiscal year
2019-08-01 14:23:34 / Myanmar Agro Food Exhibition
The Myanmar economy is expected to grow by 7pc next year. Zarni Phyo/The Myanmar Times
Myanmar expects its economy to grow by 7 percent as measured by GDP for the upcoming 2019-20 fiscal year compared to the 7.6pc expected for fiscal 2018-19.
According to the budget estimate submitted by the Union government to the Pyidaungsu Hluttaw on July 15, it expects total revenue of K25.3 trillion and total expenditure of K32.3 trillion, which will mean a 5.9pc deficit to GDP. The rate of the kyat to the US dollar was set at 1,525 compared to the current fiscal year’s 1,360.
Commenting on the deficit, a member of the parliamentary Joint Public Accounts Committee, U Sai Thiha Kyaw, said there should not be too much worry over the deficit because, as in previous years, delayed implementation of projects has led to less expenditure than what was budgeted. This was also noted in a mid-year report for the 2018-19 fiscal year, which observed that many projects have not met their deadlines and recommended full use of the allocated amounts.
“In previous years, the deficit always managed not to exceed 5pc as they can’t spend as expected. Therefore, despite budget increased for this year, we will have to wait and see whether the actual spending meet the estimated amount or not,” he said.
Meanwhile, other Hluttaw members of parliament also said they expect changes to the budget to be made after the various Hluttaw committees conduct their inspections and discussions on allocations and appropriations.
For the upcoming fiscal year, the Ministry of Planning and Finance and, the Ministry of Transport and Communications are expected to have a surplus. The Ministry of Planning and Finance, with 22pc of the budget allocation, is expected to have K9.6 trillion revenue and K7.3 trillion expenditure, with the surplus coming from state-owned banks. The Ministry of Transport and Communications, with 5.2pc of the allocation, is expected to have total revenue of K1.8 trillion against K1.7 billion expenditure.
The Ministry of Defence’s budget allocation will be the lowest in six years for the 2019-20 fiscal year as just over 10.5pc has been set aside at K3.4 trillion with revenue of K47 billion.
U Sai Thiha Kyaw noted that the defence allocation has not been cut, instead, the Union expenditure has significantly increased overall while defence spending has only seen a gradual increase.
“There are no cuts to the defence allocation, in fact the allocation has been increased, just that the overall expenditures have risen much faster compared to the military spending,” he told The Myanmar Times. In fact, defence spending will use K123 billion more than estimated for the current fiscal year.
The Ministry of Electricity and Energy, which eats up a quarter of total expenditure in the coming year, will still show a deficit in spending as spending is estimated at K8.1 trillion while the revenue is K7.4 trillion.
It is unclear if the increase in the electricity tariff rates will have an impact on the deficit spending since the budget was drafted in March/April.
The Ministry of Education, which has 8.4pc allocation from the budget, will also show a deficit as spending has been estimated at K2.711 trillion compared to revenue of K215 billion. The Ministry of Construction, with 4pc of the budget, estimates a deficit of K461 billion while the Ministry of Health and Sports, with 3.7pc of the allocation, estimates it will use more than K1.2 trillion.
For next year’s general election, the Union Election Commission is estimated to spend K70 billion. – Translated
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