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Laos: Govt aiming for trade surplus next year
The government has forecast that Laos will record a trade surplus of US$37 million next year due to various factors further boosting exports.
Minister of Planning and Investment Dr Souphanh Keomixay told Vientiane Times on Monday that hydropower will be one of the main drivers driving exports.
The prices of minerals and some agricultural products have seen an increase and we expect exports to rise at a faster rate, he said.
The minister observed that Laos imported a great deal of construction equipment and machinery for building factories, notably those in Special and Specific Economic Zones. By next year, those factories should begin operations and exports.
A senior official from the Ministry of Industry and Commerce, who wished to speak anonymously, said the export sector would grow faster towards a positive trend. He said the enforcing of Prime Minister’s Order No. 15, which bans the export of all types of unfinished wood products including timber and logs, enabled Laos to export more value-added wood products.
Issued on May 13, 2016, the PM’s order aims to make sure entrepreneurs obtain sufficient timber for their processing plants. The volume of wood exported might not be as great as in previous years, but the value will be higher. In addition, the price of rubber has seen an increase this year which has helped drive up exports.
The value of exports in the first six months of the year reached US$2,378 million or 53.3 percent of the plan, with imports at US$2,336 million or 52.1 percent of the plan, Dr Souphanh reported.
Exports are expected to reach US$4.45 billion while imports should hit US$4.48 billion, with a trade deficit of US$42 million.
When asked why Laos will face a trade deficit this year despite registering a trade surplus of US$42 million in the first six months, Dr Souphanh was reluctant to give a specific prediction regarding the performance of exports and imports over the second six months of this year. Nevertheless, the government will strive to boost exports, ensuring the value of exports reaches US$5,015 million next year with imports set at US$4,978 million.
Critics say the government needs to further boost productivity for commercial purposes to increase the value of exports. The government needs to help farmers and producers to find markets for their products or set up a price insurance scheme to ensure prices do not fluctuate too much so that farmers feel confident about boosting production.
Economists said it was important for Laos to improve the investment climate to attract foreign investment and grow the export sector, which in the long run would be good for the economy.
Source: http://www.vientianetimes.org.la/FreeContent/FreeConten_Govt218.htm