Lao Economy To Grow 7 Percent This Year: World Bank
Source: Vientiane Times
The Lao economy is projected to expand by 7 percent in 2016, with power generation expected to increase by more than 30 percent over 2015, according to the World Bank’s latest update of the Lao Economic Monitor 2016.
Laos has one of the fastest growing economies in the East Asia and Pacific region. It expanded by around 7 percent in 2015, after growing by 7.5 percent in 2014.
The World Bank found that increased power generation, services and construction contributed most to economic growth.
Ms Sally Burningham chairs the meeting in Vientiane yesterday.
Speaking at a dissemination workshop on the Lao Economic Monitor Report 2016, World Bank Country Manager for Laos Ms Sally Burningham said “Growth has been strong and many people have escaped poverty, but poverty reduction can be even stronger.”
“With its growing economy, the government can take steps to improve Laos’ business environment and attract investment to create quality non-farm jobs and raise wages, while strengthening overall competitiveness,” Ms Burningham said.
Meanwhile the World Bank Chief Economist for the East Asia and Pacific (EAP) Region MrSudhirShetty also said the developing EAP grew faster than other emerging economies and that inflation remained subdued.
“For Laos, the growth prospects for 2016-18 still appear favourable, but reliance on natural resource exports and FDI inflows imply vulnerability to global and regional risks,” he said.
Mr Shetty also noted that trade in services has potential within the AEC because this sector is the strength of Asean and increased Asean integration will open up opportunities including in transport, trade and increased participation in value chains and tourism.
The report also said that similar trends are expected to continue over 2017 and 2018. While the near-term outlook remains favourable, external risks have increased, including from the economic slowdown in China, and continuing slow growth in Thailand.
In addition, the report also finds that poverty has declined in Laos and now stands at 23.39 percent, although many households are still vulnerable and risk falling back into poverty.
“Households that recently escaped from poverty are still at risk of falling back into poverty because they live close to the red mark of poverty. Most farmers rely on rainwater for their agriculture productivity; if they suffer from climate change they will be in trouble and will be back in poverty,” an economist at the World Bank for Laos Ms Keomanivone Phimmahasay told Vientiane Times yesterday.
She explained that the rate of poverty reduction would continue to decline in the years to come due to the factors mentioned above.
When asked how the government could accelerate poverty alleviation, she said the government should boost private investment in areas that create more job opportunities.
“More usage of alternative and modern technologies in agriculture will also boost job recruitment and poverty reduction because people will move to other areas with higher wages,” Ms Keomanivone said.