Vientiane lowers GDP growth forecast
Vientiane lowers GDP growth forecast
Business activities in Vientiane represent a large share of the Lao economy, but the capital will not be able to achieve its GDP growth target this fiscal year as the agricultural output has been less than earlier expected.
The Vientiane Planning and Investment Department Director, Mr Vixay Savanna said recently that the GDP value of the capital would reach 19,116 billion kip (US$2.3 billion) at the end of 2011/2012 fiscal year, translating to about 12.2 percent growth compared to the previous year.
Earlier, the capital authorities planned to achieve economic growth of 12.5 percent this fiscal year but natural disasters caus ed serious damage to agricultural production bases in the capital at the beginning of the fiscal year, which lowered agricultural production outputs.
Vientiane will be able to produce only around 17,400 tonnes of rice this fiscal year, which represents a fall of around 7.5 percent compared to the previous fiscal year. Rice production currently accounts for 7 percent of the capital's GDP, according to the Vientiane Planning and Investment Department.
Mr Vixay said that the main driving forces of the Vientiane economy this fiscal year would be the industry sector, which was forecast to see about 15.4 percent growth, accounting for 45.6 percent of the capital's GDP value.
The second driving force in the Vientiane economy is the service sector, which accounts for 34.3 percent of the capital's GDP, and is forecast to see 9.9 percent GDP growth .
The agricultural sector, which employs the largest proportion of the Vientiane labour force, will see only 5.6 percent growth, accounting for only 20.1 percent of the capital's GDP.
Observers said that the declining agricultural output of Vientiane could have negative impacts on the wellbeing of the capital's residents, given that it is the largest source of employment in the city, and the industry and service sectors employ fewer people in comparison.
The Lao government plans to reduce the number of workers engaged in the agricultural sector, diverting them to the industry and services sectors to meet the growing demand from companies. The industry and service sector currently employs a large proportion of foreign workers from neighbouring nations.
However, the Vientiane Planning and Investment Department noted that despite not meeting growth forecasts, income per capita in Vientiane is US$2,752, remaining the highest in the country.
Over the three quarters of the fiscal year, Vientiane authorities have approved 1,826 private investment projects with a total investment value of about US$637 million, about an 8 percent drop compared to the same period last year.
The capital authorities have spent 77,906 million kip to implement 352 state investment projects this fiscal year, about 78 percent of the annual plan.
The authorities also spent some additional funds to rebuild agricultural and transport infrastructure after facing serious floods at the beginning of the fiscal year.
Over the three quarters of the fiscal year, Vientiane was able to collect 378 billion kip, representing about 84 percent of the annual plan and spent 330 billion kip, about 95 percent of the annual plan.
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