The meeting was held to approve additional budgets requested by the union government and region or state governments for the fiscal year of 2018-19 and approve this year’s Union Budget Bill before the government makes a final submission to Pyidaungsu Hluttaw.

U Win Myint said requests for additional public funds are to settle deficits caused mainly by foreign exchange losses as well as payments for land compensation, wages for civil servants, travel allowances and tax revenue shortfalls.

In the first six months of this financial year, the country’s export earnings totaled US$8 billion, which is up by more than US$650 million from the same period last year despite lower exports of rice, beans and pulses.

Meanwhile, spending on imports rose to US$8.9 billion, resulting in a trade deficit of more than US$100 million.

The country also had to repay international debt with foreign currencies, which contributed to the decline in forex reserves.

The government is requesting a supplementary budget of K 2.6 trillion for the 2018-19 fiscal year, which is 10.7 percent more than the original estimate due to fluctuations in the exchange rate which led to forex losses as well as additional funds for pensioners, said U Myint Swe, vice chair of the Finance Commission.

The supplementary budget includes K971 billion for normal expenditure, K467 billion for capital expenditure, K211 billion for financial expenditure, K709 for operational expenditure and K277 billion for increased expenditure of institutions and organisations outside the Union Budget Program.

Forex reserves in Myanmar have dwindled. The President has urged businesses to deal more in the Myanmar kyat. Photo - EPA

Special cases for the interest of the country, additional expenses for emergency cases in Rakhine State, salaries, bonuses, travel expenses, interest payments, compensation for land and crops in the project areas carried out in accordance with the country’s policy and funds for infrastructure work that need to be finished in the current fiscal year were allowed, said U Myint Swe.

After combining the initial and supplementary budgets for 2018-19, total public expenditure will total K27.2 trillion versus total revenues of K21.9 trillion, resulting in a deficit of K 5.3 trillion, or 5pc of GDP.

GDP growth in 2018-19 is forecast to come in at 7.6pc, compared to 6.2pc last year, driven by local and foreign investments as well as higher public spending, U Win Myint said.

The meeting was held after the Asian Development Bank (ADB) released its GDP forecasts for Myanmar on April 2. It expects Myanmar’s economy to expand by 6.6pc in the fiscal year ending September and by 6.8pc in the following year.

All Union and state and regional level departments and organisations have been urged to try their best to spend with their respective targets and in accordance with financial regulations, U Win Myint said.

If the gap between the allocated budget and actual expenditure continues to widen, it implies the government is not doing its job fully and efficient, he added.

The President warned that severe punishments would be dealt on firms which do not follow the rules and procedures when conductng public tenders.

Source: https://www.mmtimes.com/news/govt-asks-k26-trillion-additional-funds-cover-forex-losses.html