Global growth will have positive impact on Laos: Economists
Global growth will have positive impact on Laos: Economists
Lao economists are optimistic about continued growth of the country's economy following recent economic reports by the International Monetary Fund (IMF) and Asian Development Bank (ADB).
A senior economist from the Faculty of Economics and Business Management at the National University of Laos, Dr Phouphet Kyophilavong, told Vientiane Times on Friday that the IMF and ADB reports are reliable since these institutions are immensely capable and have vast experience in economic analysis.
�The global economy is likely to pick up in 2017 and 2018, particularly in China and Asean member countries, which will positively impact on Laos,� he said.
The new ADB report stated that economic growth in Laos is picking up this year and next, driven by the growth of productivity and sale of electricity.
Construction of the US$5.8-billion railway linking Vientiane to the Chinese border is underway. This project is expected to drive economic growth and job creation in Laos.
Gross Domestic Product (GDP) growth is forecasted to reach 6.9 percent in 2017 and 7.0 percent in 2018, according to the ADB's flagship annual economic publication, Asian Development Outlook 2017.
Meanwhile the IMF projected the Lao economy would grow at by 6.8 percent this year which is lower than the government's growth forecast of 7 percent.
According to the IMF's recent World Economic Outlook Update, the global economy is projected to pick up pace in 2017 and 2018, especially in emerging markets and developing economies.
The IMF forecast is based on the assumption of a changing policy mix under a new administration in the United States and its global spillovers.
This projection is consistent with the steepening US yield curve, the rise in equity prices, and the sizable appreciation of the US dollar since the November 8 election.
There has been a stronger-than-expected pickup in growth in advanced economies, due mostly to a reduced drag from inventories and some recovery in manufacturing output.
The economic pick-up is expected to drive growth in global demand which the Lao export sector will benefit from, particularly mining and agricultural products.
Notably, the growth forecast for 2017 was revised up for China (to 6.5 percent, 0.3 percentage points above the October forecast) on expectations of continued policy support, according to the IMF. However, continued reliance on policy stimulus measures, with rapid expansion of credit and slow progress in addressing corporate debt, especially in hardening the budget constraints of state-owned enterprises, raises the risk of a sharper slowdown or a disruptive adjustment.
Elsewhere in emerging Asia, growth was also revised down in Indonesia, reflecting weaker-than-projected private investment, and in Thailand, in light of a slowdown in consumption and tourism.
