Thailand
Lao PDR Set For Moderate Growth In 2018-2019; ADB
(KPL) The Lao People’s Democratic Republic’s economic growth is expected to moderate in 2018, as agriculture and mining outputs are forecast to underperform, although an expansion in electricity generation, construction and service will partially offset these adverse effects, has said Asian Development Bank’s report.
“In an update of its flagship annual economic publication, Asian Development Outlook (ADO) 2018, ADB projects the Lao PDR’s gross domestic product (GDP) to grow 6.6% in 2018 and 6.8% in 2019, slightly lower than its April estimates of 6.8% for this year and 7.0% for next year,” said Mr Rattanatay Luanglathbandith, Public Management Specialist of ADB.
Despite that a series of flood damaged farm outputs and disrupted transport service in the Lao PDR, growth in electricity export, foreign direct investment-related construction and services, boosted by increased tourist arrivals, should help sustain the country’s economic growth momentum, according to ADB Country Director for the Lao PDR Yasushi Negishi.
Agriculture is expected to grow by 2.0 per cent this year, while electricity generation is expected to increase by 8%, with mining output projected to decline by 2.0%.
Construction is benefiting from foreign direct investment in hydropower and transport projects, such as the railway line from Vientiane to border with China, which now under construction, according to Mr Soulinthone Leuangkhamsing, Economist, Lao PDR Resident Mission, ADB.
He said that the sharper depreciation of the Lao kip against the U.S dollar in open market, compared with the official exchange rate from January 2018 to July points to continued vulnerability to stress in external payments.
Inflation is now forecast to be 2.5% in 2018 and 3.1% in 2019 which are about half a percentage point higher than ADO 2018’s projection.
The current account deficit in percentage of GDP is projected at 13.8% in 2018 and 13.0% in 2019 lower than April estimates of 14.9% and 13.7%, respectively.
Despite the Lao PDR’s expected improvement in the current account deficit, net international reserves are forecast to remain below US$ 1 billion by December 2018, covering only 1.5 months of imports due to a large trade deficit weighing on the balance of payment.
Downside risks to the outlook in the near term include external payments vulnerability and the possibility of current natural disasters.
ADB is committed to achieving a prosperous, inclusive, resilient and sustainable Asia and Pacific, while sustaining its efforts to eradicate extreme poverty.
Established in 1966, it is owned by 67 members–48 from the region. In 2017, ADB operations totaled US$ 32.2 billion, including US$11.9 billion in co-financing.
Source: http://kpl.gov.la/En/Detail.aspx?id=39256