Laos economy speeding up
The economy of Laos is likely to grow 7.9 per cent in 2012 and 7.7 per cent in 2013, according to an outlook released by the Asian Development Bank in April.
The study says that the growth of resource-based industries, manufacturing, and services in Laos was robust in 2011, and they are expected to drive similar growth rates during the forecast period. Inflation, after speeding up last year, is projected to moderate. The country signed agreements that bring it closer to joining the World Trade Organisation.
The industry expanded by 15.6 per cent in 2011 mainly due to greater output from copper and silver mining. Hydropower output rose by 18.5 per cent last year spurred by new plants starting operations. Garment manufacturing benefited from the European Union’s trade relaxation from January 2011, boosting exports. The services sector grew by 7.9 per cent last year, and tourist arrivals went up by nine per cent to 2.7 million.
Inflation averaged 7.6 per cent in 2011, up from six per cent in 2010. Rising global oil prices drove up domestic fuel costs and the disruption to supplies of food during the 2011 floods pushed up prices of food. Higher inflation in neighboring countries China, Thailand, and Vietnam also added to pressure on prices.
In a market-opening development, the government sold stakes of about 30 per cent in two state-owned companies — power company EDL-Generation Co and Banque Pour Le Commerce Exterieur Lao — through initial public share offerings, and listed the shares on the new Laos Securities Exchange last year. Further such listings are planned.
The survey anticipates that growth looks likely to continue in 2012–2013 at similar rates to last year, based on increased activities in mining and hydropower, sectors that draw most of domestic and foreign investment.
In the capital Vientiane, the government is investing more than $180 million on building facilities for the 2012 Asia-Europe meeting of senior officials from 50 countries to be held in November 2012. China is providing loans for conference facilities and airport expansion.
Tourism will get a lift from international promotion of 2012 as Visit Laos Year and from the ASEAN University Games to be held in December 2012. Investment opportunities open up through the fact that Laos has joined Vietnam, Myanmar, China, and Thailand to form a tourism cluster where destinations are planned to be developed and promoted to achieve faster growth in the sector.
However, development of this and other industries, especially agriculture, depends on bringing down the high cost of finance, expanding education and skills training, building transport infrastructure, and addressing weaknesses in governance, the survey stated.
[caption id="attachment_2894" align="alignleft" width="300" caption="Laos is catching up to the world economy with foreign investments into mining, hydropower, and tourism"][/caption] The economy of Laos is likely to grow 7.9 per cent in 2012 and 7.7 per cent in 2013, according to an outlook released by the Asian Development Bank in April. The study says that the growth of resource-based industries, manufacturing, and services in Laos was robust in 2011, and they are expected to drive similar growth rates during the forecast period. Inflation, after speeding up last year, is projected to moderate. The country signed agreements that bring it closer...
The economy of Laos is likely to grow 7.9 per cent in 2012 and 7.7 per cent in 2013, according to an outlook released by the Asian Development Bank in April.
The study says that the growth of resource-based industries, manufacturing, and services in Laos was robust in 2011, and they are expected to drive similar growth rates during the forecast period. Inflation, after speeding up last year, is projected to moderate. The country signed agreements that bring it closer to joining the World Trade Organisation.
The industry expanded by 15.6 per cent in 2011 mainly due to greater output from copper and silver mining. Hydropower output rose by 18.5 per cent last year spurred by new plants starting operations. Garment manufacturing benefited from the European Union’s trade relaxation from January 2011, boosting exports. The services sector grew by 7.9 per cent last year, and tourist arrivals went up by nine per cent to 2.7 million.
Inflation averaged 7.6 per cent in 2011, up from six per cent in 2010. Rising global oil prices drove up domestic fuel costs and the disruption to supplies of food during the 2011 floods pushed up prices of food. Higher inflation in neighboring countries China, Thailand, and Vietnam also added to pressure on prices.
In a market-opening development, the government sold stakes of about 30 per cent in two state-owned companies — power company EDL-Generation Co and Banque Pour Le Commerce Exterieur Lao — through initial public share offerings, and listed the shares on the new Laos Securities Exchange last year. Further such listings are planned.
The survey anticipates that growth looks likely to continue in 2012–2013 at similar rates to last year, based on increased activities in mining and hydropower, sectors that draw most of domestic and foreign investment.
In the capital Vientiane, the government is investing more than $180 million on building facilities for the 2012 Asia-Europe meeting of senior officials from 50 countries to be held in November 2012. China is providing loans for conference facilities and airport expansion.
Tourism will get a lift from international promotion of 2012 as Visit Laos Year and from the ASEAN University Games to be held in December 2012. Investment opportunities open up through the fact that Laos has joined Vietnam, Myanmar, China, and Thailand to form a tourism cluster where destinations are planned to be developed and promoted to achieve faster growth in the sector.
However, development of this and other industries, especially agriculture, depends on bringing down the high cost of finance, expanding education and skills training, building transport infrastructure, and addressing weaknesses in governance, the survey stated.
