Illustrative image (Photo: nhandan.com.vn) Vientiane (VNA) - The WorldBank (WB) is optimistic about Laos’ economic growth, which is projected torebound to 6.5 percent in 2019, higher than the figure of 6.3 percent recordedin 2018.
The pickup is expected to be driven byrobust investment in mega infrastructure projects, according to the WB’s LaoEconomic Monitor released on August 12.
The country’s economic growth will also besupported by a resilient service sector led by wholesale and retail growthassociated with robust construction.
Meanwhile, the Lao Government remainscommitted to fiscal consolidation to contain public debt in the medium term bytightening public spending and improving revenue administration. This mayresult in a decline in the fiscal deficit from 4.4 percent of GDP in 2018 to4.3 percent in 2019.
Laos’ economic growth is rebounding afterdeclining in 2018 partly due to the impact of floods, Vientiane Times quoted WBCountry Manager for Laos Nicola Pontara as saying.
However, he warned, Laos is at high riskof debt distress and several measures needed to be undertaken to deal with thissituation.
Strengthening revenue collection isimportant to create fiscal deficit space and reduce the burden of public debt,Pontara said.
Looking forward, it will be important toimprove the business environment to support development of the private sector,including the growth of small-and medium-sized enterprises (SMEs). Thesemeasures can contribute to maintaining a stable macroeconomic environment,promoting job creation and reducing poverty and inequality, he added.
Lao Senior Economist at the WB Lao Office,Somneuk Davading, said compared to other countries in the region, Laos’economic growth remains strong and the nation is one of the top five fastesteconomies in the region.
Nevertheless, he said, the Lao Governmentneeds to continue its reform measures and further improve the investmentclimate to attract more capital.
The depreciation of the kip against the USdollar and Thai baht is another concern for Laos, which could impact on debtserviceability, according to the WB report.
The report also notes the key constraintsfaced by small and medium enterprises such as access to finance, competitionwith informal firms, and electricity outages.
It confirms that strengthening the performance of SMEs can improve the qualityof jobs, generate income and contribute to the greater well-being of the Laopeople.-VNA
VNA
