Reuters-ADB-Myanmar faces more slow

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Subject: Reuters-ADB-Myanmar faces more slow growth, high inflation 

ADB-Myanmar faces more slow growth, high inflation
04:32 a.m. Apr 19, 1999 Eastern
BANGKOK, April 19 (Reuters) - Myanmar's economic outlook is gloomy with slow
growth likely to continue and inflation not expected to fall dramatically
from its current rate of around 50 percent, the Asian Development Bank said.

Having shown impressive gross domestic product growth of nearly eight
percent from 1992 to 1996, rates slowed to about five percent in 1997 and
then to three to four percent last year, the bank said in its Asian
Development Outlook for 1999.

``The outlook for Myanmar is not promising,'' it said, ``Growth is expected
to remain at about three to four percent in 1999 and inflation is not
expected to fall dramatically.''

It said inflation had soared to 50 percent in 1998 due to monetisation of a
budget deficit of about four percent of GDP.

Slow growth in 1998 was largely due to adverse factors affecting the
agriculture sector, growth in which had halved in 1998, including lack of
inputs and continued government intervention in production decisions.

The report said the Asian economic crisis would continue to dampen foreign
investment inflows from other Asian countries, which accounted for 50
percent of the total.

The agriculture sector, which accounts for 45 percent of GDP, had suffered
from an acute shortage of foreign exchange, which had prevented imports of
fertiliser and diesel.

The bank said that to put the economy on track, the government needed to
speed the privatisation of inefficient state enterprises, strengthen
market-orientated reforms and establish a definite timeframe for banking
reform.

It said the adoption of a market-orientated policy had had ``some positive
effect'' on the economy in recent years.

``However, most observers agree that economic reforms have either been
incomplete or shortlived -- failing to achieve a fundamental transformation
of the economic system.

``The economy is still beset with serious macro-economic and structural
problems. Thus there is a critical need to restore macro-economic stability
and strengthen economic reforms.''

It said urgent reform was needed in trade regulation, tax collection,
industrial policy, exchange rate regulation, the management of fiscal

deficits and privatisation.

It said losses made by state enterprises meant the costs of not privatising
them worked out at more than 40 percent of the country's overall budget
deficit.

((Bangkok Newsroom (662) 253-5000 Ext 415

e-mail: rtrburo+ksc15.th.com))