Overview  The economy grew at 6.5 percent in 2012/13. The main drivers of growth were increased gas production, services, construction, foreign direct investment, and strong commodity exports. Inflation has been on the rise in recent months, reaching 7.3 percent in August 2013...  The budget deficit declined to 3.7 percent of GDP in 2012/13, from 4.6 percent in 2011/12. The 2013/14 budget provides for increased spending on social sectors, although the defense budget remains high...  The nominal exchange rate has been depreciating since the turn of the year, reaching K975 to one US dollar in July 2013 with some reversal of this trend between August and September. The current account deficit increased to 4.4 percent of GDP in 2012/13, up from 2.4 percent in 2011/12, due to import liberalization and lifting of some exchange restrictions...  Gross international reserves reached US$4.6 billion at the end of 2012/13, equivalent to 3.7 months of imports, up from US$4.0 billion in 2011/12...  The outlook is positive, with the economy projected to grow at 6.8 percent in 2013/14 and rising further to 6.9 percent in the medium-term. This will be on account of a continued increase in gas production, increased trade, and stronger performance in agriculture...  Risks to the outlook include the challenge of maintaining the reform momentum. Externally, a slowdown in Chinese domestic investment and a decline in global commodity prices would hurt commodity exporting countries such as Myanmar...  The Policy Watch section presents a number of planned or recently implemented policy reforms which reflect the country?s continuing drive to improve the business environment...  A Special Feature Article presents a summary of findings from a recent assessment of Myanmar?s Public Financial Management (PFM).