Lao PDR Economic Monitor, January 2019 : Macroeconomic Stability Amidst Uncertainty
Although decelerating from 6.9 percent the previous year, economic growth in 2018 is estimated to remain robust at 6.5 percent. The slowdown in growth in 2018 has been partly due to a combination of the following domestic factors : (i) the severe f...
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World Bank, Vientiane
2019
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| Online Access: | http://documents.worldbank.org/curated/en/818841549314902040/Lao-PDR-Economic-Monitor-Macroeconomic-Stability-Amidst-Uncertainty http://hdl.handle.net/10986/31243 |
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okr-10986-312432021-05-25T09:42:43Z Lao PDR Economic Monitor, January 2019 : Macroeconomic Stability Amidst Uncertainty World Bank Group HUMAN CAPITAL POVERTY REDUCTION ECONOMIC GROWTH ECONOMIC OUTLOOK FISCAL TRENDS TRADE MONETARY POLICY EDUCATION CHILD HEALTH Although decelerating from 6.9 percent the previous year, economic growth in 2018 is estimated to remain robust at 6.5 percent. The slowdown in growth in 2018 has been partly due to a combination of the following domestic factors : (i) the severe floods that hit the country during July – September 2018, which adversely affected agricultural production and damaged infrastructure in several provinces; (ii) the weak performance of the mining sector despite higher commodity prices; and (iii) continued fiscal consolidation, which contributed to slower credit growth. These downside factors offset the gains from the industry sector driven by the expansion of construction activities and electricity exports, coupled with robust growth in wholesale and retail trade. There is evidence of increasing job creation between 2010 and 2017. According to the 2017 Labor Force Survey, wage jobs are estimated to have gradually increased since 2010. This has resulted in 28 percent of households situated mostly in urban areas reporting an increase in income. As a result, ownership of consumption goods among the more affluent households increased faster than in poorer, mainly rural, households. Therefore, while poverty is still expected to decline modestly, inequality is likely to have increased. The government intends to remain on the path of fiscal consolidation, with the deficit estimated to decrease to 4.7 percent of GDP in 2018 from 5.3 percent in 2017, owing to some improvement in revenue collection and expenditure restraint. Improved revenue performance has been primarily driven by higher excise revenues due to increasing oil imports coupled with a higher price of oil. Other drivers include an increase in income taxes, dividend earnings, and other non-tax revenues. Strengthened revenue administration, such as the use of electronic tax payment platforms, has also supported revenue mobilization for certain tax types. Public outlays have been rationalized through tighter control of the public wage bill and downward adjustment of non-wage current spending. These measures offset higher interest payments and the increase in capital spending financed by external loans. Fiscal consolidation is estimated to have slowed the accumulation of public debt in 2018, though not enough to reverse the rising debt-GDP ratio, which is estimated to increase from 60.1 to 60.6 percent of GDP between 2017 and 2018. 2019-02-08T17:00:26Z 2019-02-08T17:00:26Z 2019-01 Report http://documents.worldbank.org/curated/en/818841549314902040/Lao-PDR-Economic-Monitor-Macroeconomic-Stability-Amidst-Uncertainty http://hdl.handle.net/10986/31243 English CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Vientiane Economic & Sector Work :: Economic Updates and Modeling Economic & Sector Work East Asia and Pacific Lao People's Democratic Republic |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English |
| topic |
HUMAN CAPITAL POVERTY REDUCTION ECONOMIC GROWTH ECONOMIC OUTLOOK FISCAL TRENDS TRADE MONETARY POLICY EDUCATION CHILD HEALTH |
| spellingShingle |
HUMAN CAPITAL POVERTY REDUCTION ECONOMIC GROWTH ECONOMIC OUTLOOK FISCAL TRENDS TRADE MONETARY POLICY EDUCATION CHILD HEALTH World Bank Group Lao PDR Economic Monitor, January 2019 : Macroeconomic Stability Amidst Uncertainty |
| geographic_facet |
East Asia and Pacific Lao People's Democratic Republic |
| description |
Although decelerating from 6.9 percent
the previous year, economic growth in 2018 is estimated to
remain robust at 6.5 percent. The slowdown in growth in 2018
has been partly due to a combination of the following
domestic factors : (i) the severe floods that hit the
country during July – September 2018, which adversely
affected agricultural production and damaged infrastructure
in several provinces; (ii) the weak performance of the
mining sector despite higher commodity prices; and (iii)
continued fiscal consolidation, which contributed to slower
credit growth. These downside factors offset the gains from
the industry sector driven by the expansion of construction
activities and electricity exports, coupled with robust
growth in wholesale and retail trade. There is evidence of
increasing job creation between 2010 and 2017. According to
the 2017 Labor Force Survey, wage jobs are estimated to have
gradually increased since 2010. This has resulted in 28
percent of households situated mostly in urban areas
reporting an increase in income. As a result, ownership of
consumption goods among the more affluent households
increased faster than in poorer, mainly rural, households.
Therefore, while poverty is still expected to decline
modestly, inequality is likely to have increased. The
government intends to remain on the path of fiscal
consolidation, with the deficit estimated to decrease to 4.7
percent of GDP in 2018 from 5.3 percent in 2017, owing to
some improvement in revenue collection and expenditure
restraint. Improved revenue performance has been primarily
driven by higher excise revenues due to increasing oil
imports coupled with a higher price of oil. Other drivers
include an increase in income taxes, dividend earnings, and
other non-tax revenues. Strengthened revenue administration,
such as the use of electronic tax payment platforms, has
also supported revenue mobilization for certain tax types.
Public outlays have been rationalized through tighter
control of the public wage bill and downward adjustment of
non-wage current spending. These measures offset higher
interest payments and the increase in capital spending
financed by external loans. Fiscal consolidation is
estimated to have slowed the accumulation of public debt in
2018, though not enough to reverse the rising debt-GDP
ratio, which is estimated to increase from 60.1 to 60.6
percent of GDP between 2017 and 2018. |
| format |
Report |
| author |
World Bank Group |
| author_facet |
World Bank Group |
| author_sort |
World Bank Group |
| title |
Lao PDR Economic Monitor, January 2019 : Macroeconomic Stability Amidst Uncertainty |
| title_short |
Lao PDR Economic Monitor, January 2019 : Macroeconomic Stability Amidst Uncertainty |
| title_full |
Lao PDR Economic Monitor, January 2019 : Macroeconomic Stability Amidst Uncertainty |
| title_fullStr |
Lao PDR Economic Monitor, January 2019 : Macroeconomic Stability Amidst Uncertainty |
| title_full_unstemmed |
Lao PDR Economic Monitor, January 2019 : Macroeconomic Stability Amidst Uncertainty |
| title_sort |
lao pdr economic monitor, january 2019 : macroeconomic stability amidst uncertainty |
| publisher |
World Bank, Vientiane |
| publishDate |
2019 |
| url |
http://documents.worldbank.org/curated/en/818841549314902040/Lao-PDR-Economic-Monitor-Macroeconomic-Stability-Amidst-Uncertainty http://hdl.handle.net/10986/31243 |
| _version_ |
1764473901106069504 |