Economic growth to remain bright over medium term
Economic growth to remain bright over medium term
Lao economic growth will remain steady at around 7.5 percent over the next few years and may recover to 8 percent in 2016, according to economists.
The economists who drafted the National Socio-Economic Development Strategy for 2016 to 2030 said on Friday that they projected economic growth to remain at around 7.5 percent this year and next year, lower than earlier projections of 8 percent.
However growth may recover to 8 percent from 2016 to 2020 as a number of investment projects will commence. Commercial operation of electricity generation plants such as Hongsa Lignite Power Plant will also help give a major boost to the economy in the years ahead.
“We have set the average economic growth rate from 2016 to 2020 at 8 percent per annum due to the fact a number of mega investment projects are on track to commence and kick off commercial operations,” the National Economic Research Institute Director General, Dr Leeber Leebouapao told Vientiane Times last week.
The Lao National Assembly has approved a government proposal to maintain economic growth at 7.5 percent next fiscal year, which will officially begin on October 1.
According to the draft of the strategy, which needs to be approved by the government, the industry and service sectors will become the main driving force of economic growth over this period.
The industry sector is projected to see 9.1 percent growth, accounting for 30.45 percent of GDP while the services sector will see 9.2 percent growth accounting for 42.16 percent of GDP.
Agriculture, which previously formed a major part of GDP, will see only 3.1 percent growth, accounting for only 19.50 percent of GDP.
The rapid growth of the service and industry sector will reduce the number of people employed in agriculture. At present, 70 percent of Lao people remain employed in the agriculture sector despite the rapid growth of the services and industrial sectors over the past five years.
Electricity generation will play a significant role to drive economic growth in future, replacing the mining sector. The current mining operations will be exhausted at some point in the years ahead.
The draft of the strategy also highlights that income per capita in Laos will almost double from about US$1,700 to US$3,344 in 2020 while Gross National Income (GNI) is expected to reach US$2,644 in 2012.
At present, Laos has no data on GNI. However, the country is considering using GNI as the main indicator of national wealth over the next few years.
Dr Leeber said that Laos saw economic growth over the past years, however, the income of the majority of Lao people remains low. He said that in many countries in particular developed nations like Japan its GNI was higher than GDP.
He said developed nations encouraged business people to invest in foreign countries, one of the main causes, which makes their GDP value lower than their GNI.
vientiane times
