Economic growth in the Lao economy was recorded at a solid 7.6 percent last year but the Asian Development Bank (ADB) has forecast that this is likely to fall slightly to 7.3 percent this year, their senior economists said.
A report was released by the ADB office yesterday at the Asian Development Outlook 2014 conference to publicise its economic predictions on the growth of the economy in Laos and other developing Asian countries.
ADB Deputy Country Director, Mr A. Barend Frielink said the Lao economy remained one of the top performers in the region in terms of economic growth.
“If we look at the growth figure it is somehow varied but the momentum of economic growth remains satisfactory for Laos,” he said.
He also said that investment in the education, health and social protection sectors will be able to obtain positive outcomes when it comes to long-term feedback.
“They are fundamental elements to boost the rapid growth of the economy in Laos as well,” Mr Frielink advised.
He said these three different sectors were not expected to generate quick outcomes, meaning it would need long-term spending befor e positive feedback was seen.
According to a press release, the economic growth of 7.6 percent in 2013 was supported by expansionary fiscal and monetary policie s.
Services expanded by 9 percent, supported by robust consumer spending. A 12 percent increase in tourist arrivals benefited hotels, restaurants and transportatio n.
Mr Soulinthone Leuangkhamsing, a Senior Economics Officer, also said the inflation rate is expected to be 5.5 percent over the year, which is slightly lower than the previous year.
“The figure of inflation is not so high but if we want to maintain the issue that exists, the government must look at the exchange rate,” he said.
ADB officials called for the government to focus on exchange rates as well as controlling the prices of some products and to manage expenditures on government approved projects to ensure they are effectively run.
Laos also hopes to benefit from foreign direct investment as several mega projects in the electric power and mining sectors are currently being developed by foreign companies from China, Vietnam, Thailand and other countries.
The ADB also noticed tha t the growth partners in Southeast Asia will be dominated by country specific factors. Sub-regional Gross Domestic Product (GDP) decelerated to 5.0 percent in 2013 as soft export markets and slowdowns affected Indonesia, Thailand and Malaysia.
Source: Vientiane Times