[Date Prev][Date Next][Thread Prev][Thread Next][Date Index
][Thread Index
]
ECONOMIC PROGRESS OF BURMA UNDER SL
- Subject: ECONOMIC PROGRESS OF BURMA UNDER SL
- From: ktint@xxxxxxxxxxxxx
- Date: Thu, 27 Nov 1997 12:31:00
Folks:
Please allow me to share a part of unofficial report on Burmese Economy
by former Chairman of Bank of Burma. This was first reported at a local
economic seminar in Rangoon in English and has never been translated into
Burmese to give military leaders hard time of understanding the contents.
Kyaw Tint
================
ECONOMIC PROGRESS OF BURMA UNDER SLORC RULE
By U Maung Maung Hla, Ex Chairman Union of Burma Bank
(Reported on September 9, 1997)
" ... economic progress (under SLORC regime) has been somewhat mixed, and
it has been accompanied by High Inflation in the transformation process.
It would seem (obviously) that further deregulation and reform measures,
particularly in the trade and exchange sectors, would be needed to remove
existing Price Distortion, and for economic progress to gain (real)
momentum."
"Although GDP has grown at an average of 8 percent during the past four
years (1992-1995), aggregate demand as indicated by the expansion of
broad money (M2) has grown much more rapidly (average 31%) during the
same period whereas the aggregate supply or real output is only 8%. As a
result, the inflation rate as indicated by the Consumer Price Index (CPI)
has averaged 22% to 33% in the past four year."
TABLE: GDP and Agricultural Output (in Billion Kyats)
---------------------------------------------------------------------------
--
1990-91 1991-92 1992-93 1993-94 1994-95
1995-96
===========================================================================
==
GDP 50.3 49.9 54.8 58.0 62.4
68.5
(% increase) 2.8 -0.6 9.7 6.0 7.5
9.8
Agri-output 19.5 18.7 21.0 22.0 23.5
26.2
---------------------------------------------------------------------------
--
"The table shown below shows that currency in circulation grew by more
that 10 times for 1985-1996 period and the CPI or inflation also grew by
_more than_ 8 times in the same period, while real output (aggregate
supply) increased by only one fifth."
TABLE: Inflation Indicators, (based on 1985 index point as 100)
---------------------------------------------------------------------------
----
1990-91 1991-92 1992-93 1993-94 1994-95
1995-96
===========================================================================
====
Demand Indicator
Currency Circulation 287.0 380.5 521.8 597.7 844.1
1062.5
Supply Indicator
GDP Real Output 89.8 89.2 97.6 103.37 115.5
122.4
Price Indicator
CPI 258.5 333.9 409.4 545.5 668.0
813.9
---------------------------------------------------------------------------
----
"The main cause of excess expenditure and monetary expansion is the high
budget deficits over the past five years. These deficits have been
largely financed by borrowing from the Central Bank of Myanmar."
TABLE: Budget Deficits, Bank Financing, and Money Supply Changes (in
Billion Kyats)
-------------------------------------------------------------------------
1990-91 1991-92 1992-93 1993-94 1994-95
=========================================================================
Budget Deficit -11.5 -12.9 -13.1 -15.5 -25.8
Bank Financing 10.8 12.7 12.9 14.9 14.0
Narrow Money (M1) 13.6 13.4 18.1 14.0 19.9
-------------------------------------------------------------------------
"It can be seen from the table above that there is a high degree of
correlation between budget deficits, Central Bank financing, and monetary
expansion (M1). Again, the rate of expansion of narrow money or currency
in circulation is highly associated with the rate of increase in the CPI."
"We can therefore deduce that high budget deficits have contributed to
High Inflation, accompanied by Sluggish output, high cost of energy and
transportation, and Shortage of Foreign Exchange leading to parallel
market rates."
\End