Laos set for 8.3 percent economic growth next fiscal year
Laos set for 8.3 percent economic growth next fiscal year
The government is optimistic that it can maintain strong economic growth of 8.3 percent next fiscal year, despite domestic and global challenges.
The Ministry of Planning and Investment expressed confidence in the high growth rate at a meeting last week to discuss the implementation of the 2012-2013 socio-economic development plan, which comes into effect next month. Prime Minister Thongsing Thammavong presided over the meeting.
A ccording to the ministry, the agriculture sector, which employs the largest proportion of the population, will see 3.3 percent growth, which will account for 25.9 percent of GDP next fiscal year. This marks the recovery of the sector from widespread flooding at the start of the current fiscal year.
Floods damaged several thousand hectares of rice in the central and southern provinces, forcing the government to revise its GDP growth forecast from 8.3 to 8 percent for the 2011-2012 fiscal year when it was realised that agricultural output would not meet set targets.
Industry, which is one of the main drivers of the economy, is forecast to see 15. 5 percent growth next fiscal year, accounting for 31.1 percent of GDP. The service sector is expected to see 7 percent growth, accounting for 37.3 percent of GDP.
The government announced the GDP growth forecast amid wide speculation that the debt crisis in the European Union, one of Laos' major trading partners and aid providers, could have a negative impact on economic growth.
But Director General of the Lao National Economic Research Institute, Dr Liber Leebouapao, said that despite these challenges, the target for economic growth would be met, and the economic situation in China and Europe would have only a small impact on Laos.
Dr Liber said the government would need to introduce concrete measures to address domestic and international challenges to maintain strong economic growth. The Institute forecasts that Laos' economic growth will remain strong in both the short and medium term.
Prime Minister Thongsing Thammavong urged the sectors concerned to manage state investment projects effectively and to bolster investment by the private sector. He also said domestic trade barriers should be abolished to create a better business environment.
According to the Lao Garment Industry Association the garment industry, which exports most of its products to the European Union, has already felt the effects of the debt crisis through slower growth in the export value of garments to Europe.
However, the rise in exports of garment products to Japan and other Asian countries should help to minimise any impacts from the European market.
Also of concern regarding its adverse effect on the Lao economy is the slowing of economic growth in China.
While China is not a major trading partner of Laos, it is the country's largest importer of copper. Many people have expressed concern that if China's demand for copper were to decline, the export price would also dip.
vientiane times
