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Govt racks up larger debt, but more is local

The NLD government has accumulated debt totaling K6.7 trillion during the duration it has been in power, according to documents supporting the 2018-19 Budget.

That’s more than half the K11.7 in debt racked up by U Thein Sein’s former administration during its entire five-year term.

However, while U Thein Sein’s Union Solidarity and Development Party (USDP) government borrowed pretty much equally from both domestic and foreign sources, around three quarters of the NLD’s debt is internal. This includes debt owed to the Central Bank and local banks that subscribe to government bonds and bills.

In other words, of the K6.7 trillion in debt the current government now holds, only K1.7 trillion is owed to foreigners.

Myanmar’s total debt as at March 31 amounted to K34.7 trillion, of which around 40 percent is foreign debt. The country borrows the most from China, followed by Japan and The International Fund for Agricultural Development, a UN agency. In total, Myanmar owes more than US$10 billion to 19 countries and institutions.

The government is expecting GDP growth to hit 7.6pc in 2018-19, President U Win Myint said. The higher level of growth is expected amid higher government spending and a wider budget deficit.

The government on July 23 submitted a spending plan for 2018-19 that will result in the highest budget deficit in years. This will include spending on infrastructure for transport and generation of electricity as well as education and healthcare.

According to the plan submitted to the Pyidaungsu Hluttaw by Minister for Planning and Finance U Soe Win, total public spending is estimated to be K 24.9 trillion versus revenues of K20 trillion, resulting in an expected deficit of K4.9 trillion, which is around 5pcof GDP.

Source: Myanmar Times

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