Lao outlook remains bright in medium term
Lao outlook remains bright in medium term
Lao GDP growth will remain strong over the short and medium term despite global economic challenges, according to the Lao National Economic Research Institute.
The institute yesterday unveiled its first publication on the Lao economic situation in 2011 and outlook for 2012, aiming to provide policymakers and investors with up-to-date information and growth forecasts for the short and medium term.
Deputy Minister of Planning and Investment Dr Khamlien Pholsena presided over a ceremony to launch the macro-economic update.
The institute predicts that economic growth will remain strong at 8.22 percent this fiscal year and will continue to grow at the same level from 2013 to 2015, as targeted in the seventh National Socio-Economic Development Plan for 2011 to 2015.
The mining and hydropower sectors will remain the main driving forces of growth despite the government's plan to suspend new mining ventures and promote investment in the modernisation of agriculture.
Components of the service sector such as banking and real estate development will also play a significant role in boosting GDP growth in the short and medium term.
The institute says global economic development faces challenges this year, namely the European debt crisis, unrest in fuel exporting countries, climate change and natural disasters. Despite these challenges, the International Monetary Fund (IMF) forecasts that the global economy will grow at 4 percent in 2012 and 4.65 percent from 2013 to 2015.
Developed countries will grow at 1.9 percent in 2012, recovering from 1.6 percent last year. Developing countries in Asia will see slower growth from 8.2 percent in 2011 to 7.99 percent in 2012 and remain at 8.5 percent from 2013 to 2015.
Laos' major trading partners Thailand and Vietnam will see strong economic growth from 2012 to 2015, enabling Laos to also maintain strong economic growth. China's economy is expected to see growth slow from 9.41 percent in 2011 to 9.04 percent in 2012.
Delivering a presentation on the Lao economic outlook yesterday, Institute Director General Dr Liber Libouapao said the ongoing European debt crisis would have negligible impact on the Lao economy in the short term.
Laos' exports to the EU account for 12 percent of total exports, while the countries that are mired in financial crisis are not significant trading partners. Only 1.9 percent of Laos' total EU exports are shipped to these markets, amounting to just 0.4 percent of Laos' global exports, he said.
Dr Liber said the sectors concerned needed to pay greater attention to price levels in domestic and world markets as unpredictable weather extremes in Laos and other countries could lead to shortages of goods and raw materials, and higher inflation in Laos. Unrest in fuel exporting countries can also cause higher fuel prices.
Laos also needs to increase its export competitiveness as the country is on track to become a member of the World Trade Organisation at the end of this year.
vientiane times
