Laos economic growth consistent at 4.03%, says govt

Sonexay attending the 18th East Asia Summit during the 43rd Asean Summit in Jakarta on Sept 7, 2023. -- AFP

VIENTIANE: Laos' annual economic growth has stood at 4.03% over the past two and half years, slightly higher than the 4% target approved by the National Assembly for the 2021-2025 period, Lao Security Radio reported on Wednesday (Nov 1), citing Lao Prime Minister Sonexay Siphandone.

The economy is expected to grow by 4.2% in 2023, lower than 4.5% projected months earlier. Due to depreciating national currency kip, gross domestic product (GDP) per capita is on a decreasing trend, the report said.

The Lao government has an ambitious plan to achieve an annual GDP per capita of US$2,880 by 2025. Gross national income (GNI) per capita is expected to reach $1,712 this year as the government is trying to record a GNI per capita of $2,280 by 2025.

"Over the past two and half years, the government has attached importance to organizational restructuring in the income and expense sector along with modernisation in the finance and budget sector to ensure a breakthrough change and the government's exceeding of its revenue collection target for two consecutive years," Sonexay told the sixth ordinary session of the National Assembly on Tuesday.

In an effort to address issues with respect to monetary instability, high inflation and fluctuating exchange rates, the Lao government has instructed the central bank to use in an integrated manner all mechanisms it has to keep the broad M2 money supply at an appropriate level and promote economic growth, focused its foreign currency use on priority imports, abolished private exchange shops and limited currency exchange service to commercial banks, according to the media report.

The ratio of foreign currency from exports transacted through banking system has increased from around 31% in 2020 to 41.32% in the first nine months of 2023. The ratio is expected to exceed 50% by the end of this year.

"Addressing the problem requires all parties, all sectors, at both central and provincial levels, and legal entities and individuals in the society to take part in decreasing the use of foreign currencies for unnecessary purposes and consider this as an expression of their patriotism," said Sonexay. -- Xinhua