Source: Vientiane Times
The Lao economy is projected to grow by about 7.7 percent this fiscal year 2015-16, slightly up from 7.6 percent last fiscal year according to the National Economic Research Institute (NERI).
The figure was reported yesterday at the Lao Economy in 2014-15 and Outlook for 2015-16 meeting, which was organised by NERI under the Ministry of Planning and Investment with support from the World Bank through the Laos-Strengthening National Statistical System Project.
The meeting was co-chaired by Deputy Minister of Planning and Investment Dr Bounthavy Sisouphanthong and Director General of NERI Dr Leeber Leebouapao.
The objective was to disseminate the results of studies on the Lao macroeconomy in fiscal year 2014-15 and outlook for upcoming fiscal years. The studies were undertaken by NERI in collaboration with other departments and development partners.
The report comprised sections on world economic performance in 2014-15 which highlighted macroeconomic changes in the world and region over the past year; Lao macroeconomic performance, which highlighted economic growth and macroeconomic stability; progress in outstanding development; economic outlook for 2015-16 and 2016-17; and global economic trends.
The report estimates that factors influencing global and domestic economies in 2014-15 were both opportunities and challenges to the implementation of Laos’ socio-economic development.
The Lao economy grew by 7.6 percent in fiscal year 2014-15, down slightly from 7.8 percent in fiscal year 2013-14.
Gross Domestic Product (GDP) per capita reached 15.4 million kip (about US$1,903).
An upsurge in retail and wholesale business, construction, agriculture and livestock breeding, electricity and water supply and the processing industry have contributed to economic growth.
Macroeconomic stability in fiscal year 2014-15 progressed compared to the previous fiscal year, while the inflation rate fell from 5.2 percent in 2013-14 to just 1.7 percent in 2014-15.
The main influencing factors were reductions in fuel and food prices; a stable exchange rate; fewer bank loans which enabled more funding for development; and a boost in foreign reserves.
But although the inflation rate fell, it was high compared to many countries in the region. The exchange rate index continued to be strong which affected exports, and there was a slight budget deficit because growth in income was slower than expenditure. This year’s economic growth rate of 7.7 percent is powered mainly by the hydropower sector and the processing industry.
GDP will grow by 7.9 percent in 2016-17 as the hydropower and service sectors continue to foster economic growth, according to the report.