On April 11, 2018, ADB has organized a meeting to disseminate the Asia Development Estimation Report. The meeting was chaired by Mr. Yasushi Nishiki, representative of ADB of Lao PDR, attracting concerned sectors to attend.
Mr. Yasushi Nishiki said “although the government prohibits the export of timber, and adds conditions to leasing tightened, the price of minerals in international markets and the number of tourists have declined; on the other hand, Lao PDR is able to preserve its growth because of sturdy support from the infrastructure development projects, electricity generation, and service sectors. Currently, some hydropower projects are under construction and will start generating in 2019, particularly Xayaburi hydropower is able to generate 1.000 megawatts, and hydropower projects are able to assist the shrinking of industry growth to be a tendency to increase. Moreover, if climate favorable to the agricultural sector, the growth of the agricultural will be approximately 3%, it is expected that the growth of the service sector will be increasing as a result of the number of tourists is higher than last year come up with the support of Visit Laos Year 2018”.
While growing, the estimation of the inflation rate will be steady at 2% to 2,5%, current account deficit will be rising to 14,9% of GDP in 2018 due to the rising of the inflation rate and oil prices in international markets. Moreover, import of machinery for infrastructure projects affected the increase of expenditure on imports and moderation of export growth. When power projects begin operating, electricity exports are expected to increase in 2019, resulting in a drop of current account deficit is 13.7% of GDP.
Therefore, external risks for economy estimation of the Lao PDR has dropped significantly in trade and no stability increases in the global or region financial markets. If the exertions of the government consolidated its financial abortive, it will give an effect to the external debts and the foreign exchange reserves for import.
News source: KPL Lao News Agency
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