Public debt of Laos set to increase due to pandemic effect

VIENTIANE, Aug 8 (Xinhua): The public debt of Laos may increase to as much as 65 to 68 per cent of GDP in 2020 following a sharp fall in national revenue collection alongside an increase in loans due to the Covid-19 (coronavirus) pandemic, according to a government official.

Revenue collection by Laos in 2020 will decrease by about 6,322 billion kip (US$ 696 million), Finance Minister and Lao Deputy Prime Minister Somdy Douangdy informed the recent ninth ordinary session of the National Assembly's eighth legislature.

The value of exports during the first six months of 2020 were at a low level of around US$2.6bil, a decreased of 5.1 percent compared to the same period of 2019, according to an assessment by an agency of the Ministry of Industry and Commerce.

Important sectors, especially processing industries and construction, showed a decreasing trend.

This included falls in cement, gold and copper production, local daily Vientiane Times reported on Friday.

The exports of several products, such as clothes, cassava, bananas, coffee, wood pulp, paper and electronic equipment, are expected to be heavily impacted.

Investments are expected to decrease. The value of approved investments through the concession system in the first five months of 2020 was only 151 million U.S. dollars, as against US$2.383bil for the same period of 2019.

The tourism sector too is expected to be further impacted during the last six months of the year, as the number of tourist arrivals in Laos in the first six months was only 887,447, a decrease of 60 per cent compared to the same period of 2019. - Xinhua