Illustrative image (Photo: Internet) Vientiane (VNA) – The Lao government has announced that itwill manage and address public debt in various ways as it seeks to ease thecountry’s financial tensions.
Prime Minister Thongloun Sisoulith told the National Assembly this week thegovernment will no longer accept loans from foreign countries, as one way oftackling the fiscal deficit, the English-language newspaper Vientiane Timesreported.
Loans will only be taken out to repay the principal on existing loans when thetime arrives for debts to be serviced.
Deputy Prime Minister and Minister of Finance Somdy Duangdy told the Assemblythe government will manage public debt in line with the law, while attemptingto shrink the fiscal deficit.
The government will also look at other ways to reduce the debt burden, such asconverting debt into capital, selling state assets, and selling shares in stateenterprises in the hope of sufficiently addressing the country’s liabilitiesand obligations by the end of this year, he said.
These moves are aimed at enhancing the country’s reputation and buildingconfidence among potential foreign investors and donors.
Concerning the debts owed by the government to private companies that haveundertaken and financed state infrastructure development projects, thegovernment will try to mobilise funding from various sources to repay them.
This could be done by issuing government bonds or transferring these debts tocommercial banks.
About 180 projects with a total value of 1.86 trillion kip will benefit fromthe government’s triangle-debt-diversion disbursement initiative, according to Thongloun.
By the end of this year, the government’s debt of 578.35 billion kip will betransferred to commercial banks. This should enable private enterprises tomaintain financial liquidity and overcome economic hurdles.
Even though the government has encountered challenges in mobilising funds torepay debts owed to domestic and foreign creditors, it has managed to basicallyresolve its liabilities.
According to the World Bank’s Lao Economic Monitor published in June, publicdebt is expected to rise to 65 to 68 percent of GDP in 2020, leaving Laos athigh risk of debt distress.
The pandemic has not only hit key economic sectors in Laos including tourism,investment and exports, which are the country’s main sources of foreigncurrency, but has also affected the economies of Laos’ key trading partners.
The economic slump in these countries is hindering the government’s efforts tomobilise funding from development partners to repay its debts./.
Prime Minister Thongloun Sisoulith told the National Assembly this week thegovernment will no longer accept loans from foreign countries, as one way oftackling the fiscal deficit, the English-language newspaper Vientiane Timesreported.
Loans will only be taken out to repay the principal on existing loans when thetime arrives for debts to be serviced.
Deputy Prime Minister and Minister of Finance Somdy Duangdy told the Assemblythe government will manage public debt in line with the law, while attemptingto shrink the fiscal deficit.
The government will also look at other ways to reduce the debt burden, such asconverting debt into capital, selling state assets, and selling shares in stateenterprises in the hope of sufficiently addressing the country’s liabilitiesand obligations by the end of this year, he said.
These moves are aimed at enhancing the country’s reputation and buildingconfidence among potential foreign investors and donors.
Concerning the debts owed by the government to private companies that haveundertaken and financed state infrastructure development projects, thegovernment will try to mobilise funding from various sources to repay them.
This could be done by issuing government bonds or transferring these debts tocommercial banks.
About 180 projects with a total value of 1.86 trillion kip will benefit fromthe government’s triangle-debt-diversion disbursement initiative, according to Thongloun.
By the end of this year, the government’s debt of 578.35 billion kip will betransferred to commercial banks. This should enable private enterprises tomaintain financial liquidity and overcome economic hurdles.
Even though the government has encountered challenges in mobilising funds torepay debts owed to domestic and foreign creditors, it has managed to basicallyresolve its liabilities.
According to the World Bank’s Lao Economic Monitor published in June, publicdebt is expected to rise to 65 to 68 percent of GDP in 2020, leaving Laos athigh risk of debt distress.
The pandemic has not only hit key economic sectors in Laos including tourism,investment and exports, which are the country’s main sources of foreigncurrency, but has also affected the economies of Laos’ key trading partners.
The economic slump in these countries is hindering the government’s efforts tomobilise funding from development partners to repay its debts./.
VNA
