Govt plans 7.5 percent growth in 2014-2015
Govt plans 7.5 percent growth in 2014-2015
The government has lowered the economic growth target from 8 percent to 7.5 percent next fiscal year as part of efforts to maintain macro-economic stability.
Minister of Planning and Investment, Mr Somdy Duangdy yesterday presented the National Socio-Economic Development Plan for 2014/2015 to a National Assembly conference in Vientiane for consideration and approval.
According to the proposed plan, the government estimated that the economic growth of Laos in the next fiscal year will see only 7.5 percent growth, lower than the 8 percent earlier estimated.
In 2011, the government projected that Laos should see at least eight percent economic growth annually from 2011 to 2015, which would create a solid foundation for the country to declare itself as having graduated from the UN's list of least developed nations by 2020.
The government achieved eight percent economic growth over the first two years of the implementation of its five year plan but is now struggling to fulfil the ambition due to delayed implementation of various mega investment projects.
Mr Somdy did not provide details as to why the government had to lower the economic growth target next fiscal year and what impact the decision will have on poverty reduction.
However many officials said that Laos needs to lower its economic growth target so as it will not face the risk of financial crisis.
The government has now cut its investment in public infrastructure after allowing huge investment in line with the long term investment programme.
To achieve 7.5 percent eco nomic growth, Laos needs to inject 39,690 billion kip (US$4.9 billion) into the economy. The business sector is expected to remain as the driving force of the economy, with forecasts predicting it will invest15,890 billion kip (US$1.9 billion), accounting for 52 percent of the total planned investment fund.
Meanwhile the banking sector is expected to contribute 6,500 billion kip (US$812.5 million) as loans for companies to expand their business, accounting for 21 percent of the total planned investment fund.
The government plans to spend 3,300 billion kip (US$412.5 billion) in its investment programme, accounting for 11 percent of the total investment.
To secure funds for public investment, the government needs to collect 25,815 billion kip. The government plans to spend 31,000 billion kip on its administration work and investment programme.
In the 2014/2015 fiscal ye ar, the agriculture sector is expected to see only 3 percent growth, accounting for 23.7 percent of GDP. Industry is forecasted to see 8.9 percent growth, accounting for 29.1 percent of GDP and the service sector is projected to see 9.1 percent growth, accounting for 39 percent of GDP.
To maintain macro-economic stability, the government plans to keep inflation growth below GDP growth and increase foreign reserve levels sufficient to secure imports of goods for more than five months.
vientiane times
