Lao economists project strong growth from next year
Lao economists project strong growth from next year
Laos is well positioned to achieve an average annual economic growth rate as high as 8.7 percent from 2013 to 2020, according to a government funded study.
The Lao National Economic Research Institute unveiled its findings on changes in Laos' economic structure on Wednesday.
“Lao GDP will see 8.2 percent growth from 2013 to 2015 and 8.9 percent from 2016 to 2020,” said a senior economist at the institute, Mr Sathabandith Insyxiengmai, when presenting the study results at a seminar on development research projects held in Vientiane on December 26.
The main driving force of economic growth is expected to be industry. Lao economists predict that industry will be responsible for 45 percent of GDP in 2019/2020, up from 28.5 percent in the 2011/2012 fiscal year.
Conversely, the percentage contributed by agriculture to GDP is expected to drop, from 27 percent in the 2011/2012 fiscal year to just 18 percent in 2019/2020. It is also expected that the contribution of the service sector to GDP will drop, from 38.5 percent in the 2011/2012 fiscal year to 32 percent in 2019/2020.
The study results also revealed that Laos could secure total investment funding of 32 to 34 percent of GDP from 2016 to 2020, or 264,000 billion kip (US$33 billion) to 296,000 billion kip (US$37 billion).
Based on these growth projections, per capita income could reach US$3,650 in 2020, the study found.
Mr Sathabandith said many countries offer special investment incentives to industry, so that this sector can grow and thrive. Most of these countries, with the exception of Japan, source their industry investment funding from foreign countries.
He also said that for industrialisation to flourish, a country must place a strong focus on education, and offer incentives to bring in modern technology.
Laos has huge investment potential in agriculture, he added, explaining that at present most crops, especially rice, are harvested only once a year. However, it is possible to have two harvests a year, thereby doubling yields.
One of the most attractive areas for investment is hydropower, Mr Sathabandith said. At present only 10 percent of this form of clean and renewable energy potential is exploited. Tourism is also another attractive investment thanks to Laos' wealth of natural beauty.
Mr Sathabandith recommended that the government eliminate administrative hurdles in order to boost productivity and development.
He also urged the government to pay greater attention to human resource development so that a skilled workforce is available to spur investment and further boost economic growth.
ventiane times
