LAOS’ ECONOMY is set to remain one of the fastest growing in the region in coming years as long as the global economic recovery remains on track, according to international financial institutions.
The World Bank “projected the Lao economy to expand at around seven percent in 2017-19 supported by a healthy pipeline of power projects and growth opportunities for the non-resource sector resulting from closer Asean integration.”
It said recoveries in global commodity prices could support mining and agricultural output along with improved connectivity to facilitate growth in tourism.
Meanwhile, the IMF has projected the Lao economy will grow at 6.8 percent this year despite the country’s revenue shortfalls and complex changes occurring in the world economy.
Independent economist Dr Mana Southichak who has led several economic research efforts on behalf of government, international organisations and private companies told Vientiane Times on Wednesday that the World Bank and IMF remain optimistic about the Lao economy.
“The World Bank and IMF might be seeing that several hydropower projects will be completed and begin operation next year which should further drive economic growth in our country,” he said.
“Higher growth of Laos’ trading partners particularly China will create stronger momentum for the economy of our nation to grow at a high rate.”
According to an IMF report, China continues to transition to a more sustainable growth path enacting reforms that have advanced across a broad domain, meaning the country has improved potential to sustain high growth over the medium term safely.
“Policy support, especially expansionary credit and public investment are believed to have helped China maintain strong growth,” the report stated.
The World Banks researchers “project growth of 6.7 per cent in 2017 and average annual growth of 6.4 per cent between 2018-20”.
Dr Mana said strong growth in China would drive demand for commodities produced in Laos notably rubber, mining and other agriculture products.