Abstract
Myanmar's historic general elections in late 2015 resulted in a wave of optimism. Foreign investor interest is strong and development partners are scaling up their engagement. The new government was formed in April and is articulating its economic plans as an integral part of political and economic transition.
The information below has become available following the issuance of the staff report (SM/17/1). It does not alter the thrust of the staff appraisal.
1. In December 2016, the parliament passed a supplementary budget for FY 2016/17 that would increase the overall fiscal deficit by 0.7 percent of GDP, but full budget implementation is unlikely (Text Table 1). The supplementary budget would increase the overall fiscal deficit to 5.3 percent of GDP from 4.6 percent for FY 2016/17 if fully implemented, making the fiscal policy stance more expansionary than envisaged. However, full budget implementation is considered unlikely, given historical under-execution of budgeted expenditures (by 2 percent of GDP on average for the past 5 years). Staff therefore does not expect the supplementary budget to have a major impact on the baseline assessment of the Myanmar economy.
2. The additional spending is mostly in the areas of infrastructure (including transportation), social services, and security. Detailed information on the supplementary budget is not yet available, but according to the available data the supplementary budget included 1.5 percent of GDP of spending, offset by 0.5 percent of under-executed spending for a net spending increase of 1.0 percent of GDP. Budgeted revenues were increased by 0.3 percent of GDP, leading to an additional financing need of 0.7 percent of GDP (0.5 percent for domestic financing and 0.2 for external financing).
Myanmar—Supplementary Budget for FY 2016/17
Staff’s calculations. Expenditure classifications may overlap.
Myanmar—Supplementary Budget for FY 2016/17
| Net Changes Relative to the Amended Budget | ||||
|---|---|---|---|---|
| (in billions of kyat) | (in percent of GDP | |||
| Supplementary revenue | 243 | 0.29 | ||
| Tax revenue | 293 | 0.35 | ||
| Non tax revenue | −177 | −0.21 | ||
| Grants | 127 | 0.15 | ||
| Supplementary expenditure | 839 | 1.00 | ||
| Additional current expenditure | 743 | 0.89 | ||
| Underexecuted current expenditure | −445 | −0.53 | ||
| Additional capital expenditure | 541 | 0.65 | ||
| Supplementary overall balance | −596 | −0.71 | ||
| Supplementary financing | 596 | 0.71 | ||
| Domestic financing | 443 | 0.53 | ||
| Foreign financing | 152 | 0.18 | ||
| Memo items: | ||||
| Supplementary expenditures 1/ | ||||
| Infrastructure and transportation | 188 | 0.23 | ||
| Social | 119 | 0.14 | ||
| Security | 86 | 0.10 | ||
| Other | 890 | 1.07 | ||
Staff’s calculations. Expenditure classifications may overlap.
Myanmar—Supplementary Budget for FY 2016/17
| Net Changes Relative to the Amended Budget | ||||
|---|---|---|---|---|
| (in billions of kyat) | (in percent of GDP | |||
| Supplementary revenue | 243 | 0.29 | ||
| Tax revenue | 293 | 0.35 | ||
| Non tax revenue | −177 | −0.21 | ||
| Grants | 127 | 0.15 | ||
| Supplementary expenditure | 839 | 1.00 | ||
| Additional current expenditure | 743 | 0.89 | ||
| Underexecuted current expenditure | −445 | −0.53 | ||
| Additional capital expenditure | 541 | 0.65 | ||
| Supplementary overall balance | −596 | −0.71 | ||
| Supplementary financing | 596 | 0.71 | ||
| Domestic financing | 443 | 0.53 | ||
| Foreign financing | 152 | 0.18 | ||
| Memo items: | ||||
| Supplementary expenditures 1/ | ||||
| Infrastructure and transportation | 188 | 0.23 | ||
| Social | 119 | 0.14 | ||
| Security | 86 | 0.10 | ||
| Other | 890 | 1.07 | ||
Staff’s calculations. Expenditure classifications may overlap.