T HE Royal Government's first fiscal year performance was this week formally recorded in the National Bank's monetary statistics - by any standards, a "remarkable" set of results, according to financial analysts.

Even the bank allowed that "the economic stablization, namely the reduction of the inflation rate... has been well achieved."

The government, despite the well-publicised sacking of a "maverick" finance minister, has muscled inflation down from 145.7 percent to just 2.3 percent during its first 12 months to September 1994.

The bank notes in its report that the new government wanted to "reconstruct the country in all fields with the aim to stabilize the political, social and economic situation."

The statistics prove in this test, the government seems to have passed with honours.

The inflation rate during the third quarter of this year stood at 3.3 percent, slightly above the first quarterly result (1.5 percent) and the second (2.3 percent).

The bank said that was due to a slight increase in food and clothing prices in September, compared with August.

The average of the CPI during the third quarter was 4,951, an increase of about 700 from the first quarter.

The increase in the average CPI was because the food sub-index increased by about 11 percent. However, the average prices for services and daily items "plunged" and clothing was almost stable, the bank said.

The government can also pride itself on seemingly achieving full control and stability in the foreign exchange rate during the first year.

The official value of the riel compared with the US dollar has barely fluctuated over the twelve months. The biggest movement in the official exchange rate, month by month, was in January 1994 (when 2,470 riel bought $1) to September (2,605).

The bank notes that: "Set against the SDR, the riel has effectively depreciated by 16.4 percent since the end of December 1993."

In the key area of foreign exchange assets, the banks says: "This aggregate has further strengthened since the beginning of the year.

"In September, net foreign assets increased by 15.2 billion riel or 5.8 percent due to an increase of 39.4 billion riel in foreign assets, which was offset by a 24.2 billion riel increase in foreign liabilities".

However, while the formal records of the government's first year were "well-achieved", according to the bank, the rice shortage ravaging the country since those statistics were published are bound to have an adverse economic impact.