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The Inflation rate in Burma is 88.8



          Corrected Inflation Rate in Burma is 88.88%

I grew up in Burma where the government announced virtually no inflation from 1960¹s to 1980¹s. But yesterday SLORC finance general admitted that the inflation is 20%. A friend of mine suggested to correct this figure by a working factor of 10 as we usually do for interpreting government data well over 30 years: when we hear the government radio says 300 students demonstrated on the street it means to most Burmese that at least 3000 students demonstrated, 20 protesters are killed means at least 200 were gunned down, and so on. This method worked extremely well so far. An inflation rate of 200%, however, is somewhat too high to convince anyone at this moment. Given current exchange rate of 254 kyats/dollar, I made the following calibration to figure out what the real inflation rate is.

         Suppose US$ inflates 1.59% annually.
         Burma's Kyat exchange rate reaches 254 kyat from 175 kyat in 6 months.
         Therefore, uncorrected inflation is (254-175)/(175 * 0.5) = 0.9029 /year
         Normalization with US$ inflation rate is 0.9029/1.0159 = 0.8888
         Thus, corrected inflation rate of Burmese curremcy is 88.88%

         Can SLORC make it better than 88.88? 


Kyaw Tint


Reuter reported:

>Win Tin said foreign direct investment had increased $2.8 billion in 1996/7
>to a total of $6 billion and said inflation had subsided to 20 percent in
>1996/7 from 25 percent the previous year.