Lao GDP growth to reach 8.3 pct this year: WB
Growing mining, construction, manufacturing and services sectors are expected to increase the growth rate of Lao GDP from 8 percent in 2011 to 8.3 percent this year, according to the World Bank's latest East Asia and Pacific Economic Update (EAP).
In contrast, the Asian Development Bank has forecast 7.8 percent growth for this year in its recent Asian Development Outlook 2012 report.
The World Bank had previously forecast GDP growth in Laos for 2012 at 7.5 percent, based on the serious impact of flooding in 2011, but revised estimates in its latest EAP released Wednesday.
Mining operations within Laos are set to expand over this year, and the climbing price of gold and copper should help increase revenue, the report said. Mining is a major industry in Laos, one of the least developed nations in the region.
Several major construction projects are being undertaken in the capital Vientiane in preparation for its upcoming hosting of the Asia-Europe Meeting in November. The airport is being expanded, 50 villas are being built for visiting heads of states and a major construction project is being initiated to redevelop a large strip of the Mekong River bank into a business and shopping district.
The manufacturing sector in Laos has been very limited, with most goods imported. Demand for concrete, construction materials, food and beverages and Lao-manufactured goods, is expected to grow. The EAP report has identified the services sector as another source of growth, with higher wholesale and trade volumes, growth in tourism, transport and telecommunications.
Lao agricultural output experienced a downturn in 2011 due to severe flooding and damage from tropical storms, but is expected to rebound this year, barring further environmental disasters. Headline inflation has trended lower from 7.9 percent (year-on- year) in November 2011 to 5.3 percent in March 2012, partly as a result of lower food and fuel costs.
Nevertheless, Lao medium to long-term growth remains uncertain due to ongoing uncertainty in commodity markets, the euro crisis and China's slowdown, the report said.
Overall, Laos is against the trend in the region, where GDP growth has slowed from 10 percent in 2010 to 8.2 percent last year. The region is still outperforming the developing country average world-wide by 2 percent, and poverty continues to decline.