Deficit may decline by 4.2 percent in 2014-15
Deficit may decline by 4.2 percent in 2014-15
Laos may expect to see new opportunities for foreign investment, lower costs for some imports, and potential future inflows of professional services that the country lacks, when it comes to Asean Economic Community integration, according to the World Bank.
In the World Bank's latest Economic Monitor, it indicated that the Lao economy continued its robust expansion with growth around 7.5 percent in recent years, fuelled by robust activity in construction, forestry and services.
“Laos has been growing fast in terms of economic development over the past years and job recruitment is more in the agriculture sector but productivity is still low when compared to the power and mining sectors,” said the World Bank's Country Senior Economist Mr Evgenij Najdov at a meeting in Vientiane yesterday.
He noted that the power and mining sector has a smaller rate of job recruitment but it produces impressive productivity, which may cause difficulties for other sectors.
The dissemination of the Lao Economic Monitor was chaired by the World Bank's Country Manager Ms Sally Burningham, and representatives from various ministries, universities and international development partners were invited to the meeting.
Speaking at the meeting, Ms Burningham said that the Lao government has taken some steps to restore macroeconomic stability but it is also critical that these efforts continue.
“In the longer term, efforts to create a conducive business environment and create more productive jobs can help the country to grasp opportunities from regional integration, as well as foster shared prosperity and reduce poverty,” Ms Burningham said.
In the report, the World Bank, indicates that the fiscal deficit in the fiscal year 2014-15 is expected to decline slightly to 4.2 percent of the annual budget, as improved tax administration offsets lower resource revenues and controls on spending remain tight, supported by the lower public recruitment and wage freeze for civil servants.
For the public debt, it was estimated at 60 percent of GDP by the end of 2014 and credit growth has slowed but continued monitoring of the financial sector is necessary to safeguard stability, the World Bank report noted.
The World Bank also forecast that economic growth in Laos is expected to moderate to 6.4 percent due to the decline in mineral production and falling commodities prices.
It also suggested that Laos would need to create a conducive business environment and ensure the effective implementation of reforms, which will best equip the country to benefit from increased regional integration.
