Laos Assembly says economy to grow at least 4.4 per cent and country on right path in resolving economic woes

  • Laos
  • Sunday, 11 Dec 2022

VIENTIANE, Dec 11 (Vientiane Times/ANN): Economic growth is poised to reach 4.4 per cent in 2022, meeting the target set in the national agenda of at least 4 percent, the government has informed the National Assembly (NA).

The government has dubbed efforts to address the country’s financial and economic difficulties as a national agenda, which requires all sectors of government to intensify their actions to resolve these problems.

Outlining the progress made in the 15 months since the national agenda was introduced, Deputy Prime Minister Dr Sonexay Siphandone (pic) said revenue has also increased.

Revenue collection is projected to reach 32,447 billion kip, representing 15.28 per cent of gross domestic product (GDP) and exceeding the target figure of 15 per cent.

This means the budget deficit will represent just 0.99 percent of GDP, which is also below the target figure of less than 2 per cent.

The Deputy PM said the servicing of public debt is still manageable and will ensure that Laos does not slide into default.

In addition, foreign reserves are sufficient to cover more than three months of imports, as targeted.

Another encouraging sign is that non-performing loans stood at 2.15 percent in September, lower than the targeted 3 per cent.

Many targets are likely to be met despite the fact that the economy continues to face significant challenges due to the sharp depreciation of the kip, skyrocketing inflation, and the uncertain global economic environment.

Dr Sonexay said the main emphasis of the national agenda is on strengthening the production base with a view to increasing exports, while also reducing imports.

Year-on-year exports of farm products grew by about 15 percent, worth more than US$489 million.

The total value of exports has surpassed US$1,183 million, of which more than US$1,129 million was earned from crops and the remaining US$53 million came from the sale of livestock.

“The business environment has improved, with barriers removed to promote production and export,” the Deputy PM told the ongoing ordinary session of the NA’s 9th legislature.

Meanwhile, imports of farm products have dropped by US$9.54 million.

Lao authorities are engaged in talks with their Chinese, Thai and Vietnamese counterparts on ways to export more categories of Lao farm products to their markets to further boost exports.

Electricity exports grew by 7.5 percent, bringing the total earned to US$1,769 million, while the value of energy imports fell by 72.7 percent to US$18 million.

Meanwhile, piloted mining projects have generated pre-obligation fees of 529 billion kip and more than US$56.8 million for the state, according to Dr Sonexay.

The easing of Covid restrictions enabled garment factories to resume production, leading to growth in this sector, with exports rising by 25 percent to US$191 million.

However, the value of industrial exports from all special economic zones was recorded at just over US$287 million.

This lower-than-expected return was caused by uncertainties in the global economy, rising production costs and inflation, as well as the depreciation of the kip and Covid-19 restrictions.

“These have caused some factories to remain temporarily closed while some have shut down permanently,” Dr Sonexay said.

Tourism is showing signs of revitalisation, giving a boost to hospitality businesses, following the full opening of the country in May.

As of September, some 644,756 foreign tourists had entered Laos. It is estimated that this number could reach one million for the whole of 2022, generating as much as US$285 million.

The transport and logistics sector has become an important economic driver, bolstered by the opening of the Laos-China Railway and three dry ports – one each in Vientiane and the provinces of Savannakhet and Champassak. Some 74 billion kip was generated for the state budget by this sector in the first nine months of 2022.

In addition, authorities are escalating action to modernise revenue collection and plug loopholes to prevent the loss of money owed to the state, which has served to increase the state’s income, Dr Sonexay said.

Efforts have also been intensified for the better management of state expenditure and investment projects, to ensure their effectiveness.

During this month’s parliamentary session, authorities will also outline the progress made in implementing the national agenda on tackling the drug trade. - Vientiane Times/ANN

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