RANGOON — President U Htin Kyaw addressed challenges to Burma’s financial sector and announced preparations for reform at a financial commission meeting in Naypyidaw on Monday.
When the new National League for Democracy government assumed power in April, budget estimates for the 2016-2017 financial year and the Union Budget Law were amended and Union ministries were reformed, causing financial difficulties.
“The nation is preparing to accelerate reforms in the monetary sector,” the President was quoted by state-run Global New Light of Myanmar on Tuesday.
President U Htin Kyaw addressed the need to revise budget estimates submitted by states and regions for the 2016-2017 fiscal year. Government expenditures have changed and the President urged ministers to postpone spending their budgets, as it would affect other areas of the country.
The President added that the government is seeking additional grants and subsidies for the country’s small and medium industries and called for frugal and systematic spending during a time of slow economic growth.
Dr. Maung Maung Lay, vice chairman of the Union of Myanmar Federation of Chambers of Commerce and Industry (UMFCCI), told The Irrawaddy that the government should address financial sector reform as soon as possible, as economic growth has been sluggish since April.
“Now that the government has acknowledged that economic growth is slow, they can prepare for risk in the coming years,” he said.
“Some international organizations are optimistic regarding the country’s economic growth, but the government can take what has happened this year with the economy and better prepare for next year,” Maung Maung Lay added.
He said a major problem in the country is the growth of informal trading and that if the government cannot prevent increased informal trade, the trade deficit will grow, inflation will increase and economic growth will stagnate.
Economist Dr. Aung Ko Ko echoed the UMFCCI chairman and told The Irrawaddy that if the government does not address financial sector reforms soon, the trade deficit, value of the kyat, gross domestic product and inflation will all be negatively impacted.
The challenges of the government transition left the economic situation unpredictable, but next year we will see a new budget, new investment law rules and regulations, and new economic policies in action, he added.
The World Bank has predicted Burma’s economic growth in the 2016-2017 fiscal year to reach 7.8 percent and inflation to reach 8.5 percent.