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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


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) 

"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   
GDP          50.3        49.9         54.8        58.0       62.4      
(% increase)   2.8       -0.6         9.7          6.0        7.5       
Agri-output   19.5       18.7         21.0        22.0       23.5      

"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   
Demand Indicator       
 Currency Circulation    287.0    380.5    521.8    597.7     844.1     
Supply Indicator       
 GDP Real Output          89.8     89.2    97.6     103.37    115.5     
Price Indicator       
 CPI                     258.5    333.9   409.4     545.5     668.0     

"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."