Laos: NA approves economic growth rate of 4.5 percent for 2023
The National Assembly (NA) has approved an economic growth rate of at least 4.5 percent for 2023 as proposed by the government amid a global economic downturn.
The agriculture sector is expected to grow at 2.5 percent, representing 17.2 percent of the Gross Domestic Product (GDP), while industry will grow at 5 percent, accounting for 34.2 percent of the GDP.
The services sector is expected to grow at 4.7 percent, making up 37.5 percent of the GDP, while tariffs and taxes are expected to expand 4.3 percent, representing 11.1 percent of the GDP.
The value of the GDP is expected to increase to 234,160 billion kip by the end of the year, with the GDP per capita at US$1,625, and the gross national income (GNI) per capita at US$1,534.
The Deputy Chairman of the NA’s Planning, Finance and Auditing Committee, Mr Thanta Kongphaly, highlighted key accomplishments made by the government during 2022 and challenges that lie ahead in 2023.
“Our NA has realised that the government’s implementation of the socio-economic development plan for 2022 took place at a time when Laos was hit hard by the global economic downturn and the Covid-19 pandemic,” he said.
“Laos’ economy is expected to grow by 4.4 percent over the whole of 2022, which was lower than the target of 4.5 percent approved by the NA.”
Mr Thanta urged the government to work harder to curb inflation and stabilise exchange rates to minimise impacts on the Lao economy and the livelihoods of the people.
The Minister of Planning and Investment, Mr Khamjane Vongphosy, said the government has pledged to manage inflation at the ceiling rate of not more than 9 percent for 2023.
The economic and financial difficulties, notably the skyrocketing inflation, directly impacted the livelihoods of the people, particularly the poor, he said.
The year-on-year inflation rate jumped to a new high of 38.46 percent in November 2022, up from 36.75 percent in October.
Mr Khamjane said the amount of M2, or money circulating in the economy, will increase by 26 percent in 2023 when compared to the figure for 2022, and ensure sufficient foreign currency reserves for the purchase of imports for at least three months.
The minister said the government will strive to stabilise exchange rates and ensure the depreciation of the Lao kip is managed at a level that does not ramp up too much pressure on inflation.
Over the past few years, the continuing depreciation of the Lao kip resulted in rising amounts of public debt owed to foreign countries, since Laos had to spend more to buy foreign currencies to repay the nation’s debts.
In 2022, the GNI per capita reached only US$1,729, which was lower than the rate of US$2,358 approved by the NA. The GNI per capita declined from US$2,161 in 2020 and US$2,004 in 2021 due to the devaluation of Lao kip.