Lao economy to recover next fiscal year
Lao economy to recover next fiscal year
The government expects the national economy will recover next fiscal year after experiencing a minor drop.
According to a report from the Ministry of Planning and Investment, the government predicted Laos would only see a 7.8 percent rise in economic growth this fiscal year, which is lower than expected.
The government had planned to ensure GDP growth by at least 8 percent per year from 2011-15 as part of its efforts to create a concrete foundation for the country to graduate from the UN's list of least developed nations by 2020.
The report, which was distributed at a meeting between cabinet and provincial governors in Vientiane last week, also indicated that the Lao GDP value would reach 103,000 trillion kip (US$12.8 billion) in the 2014-15 fiscal year. In comparison to this financial year that would be an 8 percent increase.
The report did not provide details on what exactly caused the Lao economy to slow down and what would drive the economic growth in the next fiscal year.
However, the Lao National Economic Research Institute and international financial institutes including the World Bank said the halt in gold production at Sepon mine and delayed construction of the hydropower plants had caused the slowdown in economic growth.
T he completion of the power plants in 2015 and 2016 would become the main driving force behind Lao economic growth next fiscal year, they said.
The M inistry of Planning and Investment said the agriculture sector would see a 3.3 percent growth next fiscal year, accounting for 25.59 percent of GDP, the industry sector would see an 11 percent growth, accounting for 30.3 percent of GDP and the service sector will see 9.6 percent growth, accounting for 38.9 percent of GDP.
The Bank of the Lao PDR announced that in order to maintain a macro economy it would try its best to maintain a strong foreign reserve level, which could secure the import of goods for at least five months while the currency exchange rate should be flexible within a 5 percent range.
The government expects the value of Laos exports in the 2014-2015 fiscal year will be around US$2.6 billion while imports will be approximately US$3.7 billion, which would cause a trade deficit of around US$1.1 billion.
The main factor causing the trade deficit will be the inflow of foreign investment.
The government expects to collect 23.7 trillion kip (US$2,9 billion) and a 4.9 percent increase compared to this fiscal year while they plan to spend 31.2 trillion kip (US$3,9 billion).
The government also anticipates a 7.4 trillion kip (US$926 million) budget deficit next financial year, which would account for 7.17 percent of GDP.
The gover nment plans to mobilise grants and loans to address the budget deficit.
vientiane times
