Summary: "In the Framework for Economic and Social Reform (FESR) 1, the Government of Myanmar (GOM) outlined the need to increase public expenditure in the social sector and for infrastructure to support economic growth and fight poverty. FESR also stated that government expenditure on health and education will increase, whilst defence expenditure will decline. Therefore, the United Nations Children Fund Myanmar, (UNICEF) in collaboration with the Myanmar Development Resource Institute - Centre for Economic and Social Development (MDRI-CESD) have developed this report examining current social sector expenditure and the fiscal space available to increase this spending. In order to understand how public finance could be better oriented towards children, the objectives of this paper were: • To identify and highlight trends in terms of public sector expenditures, their allocation and growth rates, especially those related to the ?social sector”; • To assess the overall impact of State-Owned-Enterprises (SOEs) on the budget; • To examine the fiscal flow to the states/regions; and • To analyse trends in revenue and expenditure. Key Findings from this report include: • The Government has made commitments to reduce Myanmar?s fiscal deficit, with projections currently suggesting it will decline to 5 per cent of GDP by 2014-15, from 9 per cent in 2012- 13. However, it is still uncertain to what extent the supplementary budget might impact the final figure. • SOE?s make significant contributions to government revenue and expenditure. Although their net contribution to the fiscal balance varies between SOEs, many are increasingly being exposed to market forces, which is expected to improve their overall impact on the fiscal balance and potentially increase fiscal space for children • Social sector spending (health, education and social welfare) has increased since 2011-12, averaging between 5-9 per cent of total expenditure, compared to defence which still absorbed 13-15 per cent of total expenditure over the same period. Despite this, the proportion of expenditure allocated to defence has declined since 2011-12. • Budget allocations for education rose from just under 4 per cent of the budget in 2011-12 and is projected to reach nearly 6 per cent in 2014-15. • Expenditure on health tripled, from 1 per cent in 2011-12 to 3 per cent of the budget in 2012-13. • Allocations for social welfare have declined from under 0.2 per cent of expenditure in 2011- 12 to 0.1 per cent in 2014-15. Despite this, social welfare expenditure in absolute terms is at approximately the same level in 2014-15 as it was in 2011-12..."