Lao Economic Monitor, May 2016 : Challenges in Promoting More Inclusive Growth and Shared Prosperity
The Lao economy is estimated to have expanded by around 7 percent in 2015, a slight moderation from 7.5 percent in 2014. Similar to the last decade, the resource sectors (hydropower and extractives) continued to make an important contribution to gr...
| Main Authors: | , |
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| Format: | Report |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2016
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2016/05/26379887/lao-economic-monitor-challenges-promoting-more-inclusive-growth-shared-prosperity-thematic-section-drivers-poverty-reduction-lao-pdr http://hdl.handle.net/10986/24372 |
| Summary: | The Lao economy is estimated to have
expanded by around 7 percent in 2015, a slight moderation
from 7.5 percent in 2014. Similar to the last decade, the
resource sectors (hydropower and extractives) continued to
make an important contribution to growth. Power generation
got a boost from the commissioning of the first two blocks
of the 1,878 MW Hongsa lignite power plant and an additional
250-300 MW of installed capacity in the hydro sector.
Furthermore, despite lower global commodity prices, mining
output still increased as metal prices remained above the
mines’ cost recovery levels. The revised State Budget Law,
approved in December 2015, enhances the authority of the
National Assembly in budget oversight and Ministry of
Finance in budget management. In addition, with regards to
anti-money laundering and counter-terrorism financing, the
Government strengthened key regulations (including on
forfeiture of assets, border declaration, penalties for
non-compliant entities) recommended by the Financial Action
Task Force (FATF), which helped remove Lao PDR from the
FATF’s list of ‘jurisdictions not making sufficient
progress’. The outlook will depend on the progress in the
implementation of the recommendations and agreed measures.
GDP is expected to expand at around 7 percent per annum as a
healthy pipeline in the power sector keeps investments
strong and increases electricity production and exports by
almost 40 percent. Stabilization of growth rates in China
and some acceleration in Vietnam and Thailand should
increase demand for Lao PDR exports. On the other hand, some
gradual fiscal consolidation is expected, largely through
broadening the revenue base and efforts to improve
efficiency in spending and should help strengthen the
outlook for public debt sustainability and lower the risk of
debt distress from its current level of moderate, but
borderline to high. |
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