Energy sector to be major contributor to GDP: minister
Energy sector to be major contributor to GDP: minister
The Ministry of Planning and Investment is confident that economic growth will reach 7 percent next year due to the growth of the industrial sector.
It is envisaged that industry will grow by 8.9 percent and will contribute 37.2 percent of GDP.
Minister of Planning and Investment Dr Souphanh Keomixay told the National Assembly on Wednesday that the energy sector will undergo considerable growth, with several hydropower plants set to come on line and begin energy generation.
The energy sector will be the major source that will push up economic growth to 7 percent, he said.
Many power plants are now fully operational including the Hongsa Mine Mouth Power Project that has installed capacity of 1,787MW. Other major power plants (at least eight) will come online soon, including the Xekaman 1 with 322MW, Nam Ou 5 with 240MW and the Nam Lik and Nam Phay hydro plants.
The industrial sector will include the growth of the processing industry because, based on the investment law, the government has promoted investment in economic zones.
The service sector expects growth of 7.8 percent to contribute 34.7 percent of GDP. The service sector includes finance.
The mining sector expects to maintain the same rate because the price of gold and copper ore will not increase on the global market, which will be only 70 percent of the production cost.
The construction sector will also grow, especially through the construction of the railway that will begin next year.
The government's investment projects will also maintain the same growth rate or a little lower.
Agriculture is expected to see growth of 3.1 percent covering 18.8 percent of GDP, and more attention will be paid to crop quality, including rice. We hope to have about 4.35 million tones of rice, Dr Souphanh said.
That is why the 7 percent growth next year will be possible or it may be about 7.2 or 7.3 percent, he said.
In 2017, GDP is expected to grow by 7 percent amounting to 129,683 billion kip with GDP per capita equivalent to US$2,341 (more than 19 million kip) and Gross National Income per capita reaching US$1,850 (more than 15 million kip).
The government is promoting the rapid development of power plants for local supply in a bid to cut electricity imports.
According to Minister of Energy and Mines Dr Khammany Inthirath, as of 2015 Laos had built 38 power plants at a cost of more than 81.7 trillion kip (US$10 billion) with a total installed capacity of 6,265MW. Combined, they can generate 33,315 million kWh of electricity a year.
There are 45 power plants under construction and more will be developed.
Laos is aiming for a total installed capacity of about 12,000MW by 2025, the Ministry of Energy and Mines reported.
The abundant resources of the Mekong River and its tributaries give Laos the potential to produce more than 25,000MW of electricity.
In 1975, only 19,000 families or 3 percent of the total population had access to electricity, but today 89.6 percent of the population can access the power grid.
