Lao GDP sees robust growth amid economic challenges: ADB report
Lao GDP sees robust growth amid economic challenges: ADB report
Economic growth in Laos was 7.7 percent over the last year, and is expected to reach 7.9 percent in 2012, better than forecast for most others in the region, Asian Development Bank (ADB) Deputy Country Director for Laos Barend Frielink told a press conference on Wednesday.
In 2013 Lao growth is forecast to return to this year's rate. "We expect Laos to do much better in 2012 - 2013 than many other regions", said Frielink.
Overall, Frielink was positive about growth in Asia, "The outlook for development in Asia is actually much better than I expected, given the global environment. For all of Asia there is an expectation for a slight slowdown this year to 6.9 percent, then a pick up again in 2013 to 7.3 percent."
However, Laos, one of the least developed nations in the region, faces challenges in the near future, such as rising inequality and inflation due to rising prices on imported goods and credit growth. Laos' inflation is predicted to be around 6.7 percent in 2012, reducing to 6.0 percent in 2013, according to ADB figures.
Other challenges for Laos identified by the ADB are achieving higher growth with continued macroeconomic stability, stronger banking supervision, and maintaining the exchange rate and price stability. To achieve high growth without effects on stability, tighter fiscal and monetary policies will be required.
These figures and analyses were released on Wednesday as part of the ADB's flagship annual economic publication, Asian Development Outlook 2012 report. ADB, consisting of 64 member countries, is a regional development bank based in Manila. The bank is closely modeled on the World Bank, but with an Asian focus.
In the medium term, ADB forecast in a press release that Laos would need to "diversify its economic base and generate more jobs for the growing labor force. A key issue is the need to step up efforts to improve the business sector."
Electricity output rose a massive 140 percent in 2010 as Laos opened a new hydroelectric plant, Nam Theun 2. Further mega- projects, such as Nam Theun 2, will need to be closely monitored to avoid negative social and environmental impacts thus ensuring the future economic growth is sustainable, the ADB warns.
xinhua
