Laos to see little impact from Asian economic slowdown
Laos to see little impact from Asian economic slowdown
Laos expects to face no real negative impacts from the slowdown of Asian economies, according to a senior Lao economist.
“I think that Laos will face no significant impacts from the Asian and Chinese economic slowdown since our exports to those markets are very small,” said Dr Leeber Leebuapao, Director General of the Lao National Economic Research Institute.
However, he said that the concerned sectors should keep a close eye on the regional economy as if the regional situation gets worse, the country will not be able to avoid the possible impacts of a wider slowdown.
The economist made the comment after the Asian Development Bank revised down the economic growth forecast for the region this week, raising questions as to whether the slowdown of the regional economy will cause any impacts in Laos, with the government targeting at least 8 percent economic growth over the next few years.
The latest Asian Development Outlook Supplement released this week trimmed the 2013 growth forecast for the 45 developing member countries of the ADB to 6.3 percent and cut its 2014 forecast to 6.4 percent. In April, the bank had predicted the region to grow 6.6 percent this year and 6.7 percent next year.
“The drop in trade and scaling back of investment are part of a more balanced growth path for China, and the knock-on effect of its slower pace is definitely a concern for the region. But we are also seeing more subdued activity across much of developing Asia,” said ADB Chief Economist Changyong Rhee.
According to Lao Minister of Finance, Mr Phoutphet Khamphounvong, Laos has already seen negative impacts from the US and European economic slow down. One of the impacts is that the government cannot collect revenue from the mining sector in accordance with earlier forecasts as the prices of copper and gold on the world market continue to drop.
In order to address the negative impacts from the European and US economic slowdown, Laos focused its exports more on the Asian market including Thailand, Vietnam and China.
According to Asian Development Bank, Chin a- home to developing Asia's largest economy - is likely to see its economy expand by 7.7 percent this year and 7.5 percent in 2014 after recording growth of 7.8 percent in 2012. The report notes that import and export growth has slowed given weak external demand, but notes continuing robust consumer confiden ce.
Slower growth in China has subdued the outlook for the entire East Asian region as well as, to a lesser extent, for Southeast Asia where the Philippines and other large Asean countries are otherwise seeing solid growth, the report highlights.
In India, meanwhile, slow progress in pushing through the reforms needed to ease business bottlenecks means growth is likely to be 5.8 percent this year, slower than the previously forecast 6.0 percent.
The ADB maintains its 2014 forecast of 6.5 percent for 2014. Elsewhere in South Asia, Sri Lanka continues to grow strongly while other parts of the region will see softer than anticipated growth.
The report has also trimmed forecasts for Central Asia, reflecting the sluggish economic performance of Kazakhstan and Georgia, and for the Pacific where Timor-Leste is seeing a slowdown in government spending.
Inflation pressures, meanwhile, are waning on the back of declining energy and food prices, given slower global demand for fuels and bumper grain harvests.
vientiane times
