GDP Grows by 4.8%: Minister of Planning and Investment
Source: Lao News Agency
In the first six months of 2023, following the eased Covid-19 pandemic, production and service sectors have enjoyed constant growth, with Gross Domestic Product (GDP) reaching over 118 trillion kip, growing by 4.8% year on year, higher than 4.5% set by the National Assembly, according to Minister of Planning and Investment Khamjane Vongphosy.
Briefing the 5th Ordinary Session of the National Assembly this morning about the assessment of the implementation of the National Socio-economic Development Plan in the first six months of 2023, Minister Khamjane pointed out that the main factors behind the constant economic growth included services, including wholesale and retail, tourism, and transport.
The government has implemented strictly a monetary policy to ensure monetary and price stability and contribute to economic recovery and strengthen the economic foundation including the increasing of primary interest of the Bank of the Lao PDR from 6.5% to 7.5% for Lao currency (not more than 7 days), increase compulsory reserve ratio from 5% to 5,5% for Lao Kip and from 5% to 8% for foreign currency.
Bank of the Lao PDR 6-month bonds worth 4 trillion kip has been sold with an annual interest rate of 15% for six months and 20% for one-year deposits.
The government has established the Department of Foreign Currency Management to implement legal instruments subordinated to the law on foreign currency management and established BoL representative offices in Golden Triangle Area and Boten Economic Zone.
The government has endorsed a credit policy to boost the economy in line with its policy on developing a spearhead economy, regional economy, and export-oriented production and promoting microenterprises, and small and medium enterprises.
Inflation in the first six months has been estimated at 38.06%. Food and non alcoholic beverage has the highest inflation rate of 49.07%, followed by medicine and healthcare products 38.77%, restaurants and hotels 35.21%, communications and transport 32.97%, and household utensils 32.86%. Key drivers of inflation include high production costs of fuel, agricultural inputs, animal feeds, fertilizers and Kip’s dramatic depreciation against foreign currencies.
As of May 2023, the foreign reserve was estimated to be able to sustain 4.03 months of imports.
So far this year, foreign trade has been valued at 6.29 billion US dollars, increasing by 3.46% year on year. The amount for the first six months is expected to be 7.54 billion kip, an annual increase of 2.55%.
Exports in the first half of the year reached 3.64 billion US dollars, which increased by 4.74% as compared to the same period last year. Yet, the exports in the first six months is expected to be 4.27 billion US dollars, rising by 2.49%.
Major exports included electricity, mixed gold, gold bars, cassava, paper and paper products, potassium, bronze ores, wood pulps, paper scraps, iron ores, clothing, banana, sugar, and latex.
Imports in the previous months were estimated at 2.64 billion US dollars, representing an increase of 1.75% as the imports in the first six months were expected to be 3.27 billion US dollars, increased by 2.62% year on year.
Major imports included fuel, machinery, vehicles, iron and iron products, steel, plastic products, car parts, electric appliances, power cables, and chemical products.
The country is expected to record a trade surplus of 998.26 million US dollars.
The government has recorded positive progress in reforming five strategic state enterprises namely Electricite du Laos, EDL Gen, Lao Airlines, Lao State Fuel, and Agro-Industrial Development and Service State Enterprise, according to the Minister of Planning and Investment.
