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Tightening Demand to Maintain Macroeconomic Balances : Lao PDR Economic Monitor, November 2012(World Bank, Vientiane, 2012-11) World BankGlobal and regional economic development continues to face uncertainties in 2012. East Asia and the Pacific region's growth is estimated to slow down compared to 2011, but remains robust compared with other regions thanks to sustained domestic investment and consumption. Lao PDR continues to maintain robust growth this year but faces a challenge to manage domestic demand. On the supply side, the construction, services, industry and agriculture sectors are the main drivers of growth; while on the demand side, public spending and private investment including demand driven by preparations for the Asia-Europe Meeting (ASEM) has played an important role in boosting the economy this year. In spite of robust growth, inflation has been declining, mostly on account of declining food and fuel inflation. However, home-grown and external risks associated with low reserves coverage, increased exposure to mining revenues, fast banking expansion with limited supervision capacity and a large number of newly announced large investment projects warrant close monitoring to preserve macroeconomic stability and sustainable growth. Stronger than expected revenue performance from the mining sector and external grants contributed to an improvement in the fiscal performance in FY11/12.With the contribution of mining revenue increasing, closely monitoring commodity price fluctuations is becoming increasingly important. The fiscal deficit in FY12/13 is expected to slightly widen as a result of a planned wage increase. Strong pressure on external reserves calls for tightening of aggregate demand. Credit growth remains high and is putting pressure on falling reserves. Credit growth has picked up in June 2012 driven by increased credit to the private sector and SOEs. Private sector credit growth is driven by buoyant performance in construction, manufacturing and service sectors. The Bank of Lao PDR's disbursements to local infrastructure projects have moderated compared to their peak in 2009, but are ongoing as a result of previous commitments.
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Sustaining Robust Growth, Mitigating Risks and Deepening Reforms : Lao PDR Economic Monitor, May 2012(World Bank, Vientiane, 2012-05) World BankWith development soaring in construction, manufacturing, mining and services, Lao PDR's economic outlook in 2012 is positive. As the driving force behind the domestic economy, these sectors are anticipated to drive a projected growth of 8.3 percent by year-end. To begin, higher wholesale and trading, tourism as well as transport and telecommunications will impact the service sector this year. A construction boom is also on the horizon supported by the preparation for the 9th Asia-Europe Meeting (ASEM) in Vientiane Capital. With this said, construction will support the manufacturing sector with the additional demand for cement and construction materials. Food and beverages will also expand in response to sustained domestic demand. Additionally, Phu Bia mining company's upgrade of existing copper and new gold and silver projects will generate more output from the mining sector. On the other hand, the power sector will contribute less in comparison to last year, despite the operation of Nam Ngum 5 hydropower project. In the mean time, agricultural output is expected to rebound after the adverse impacts of 2011's floods. Despite this robust growth, the medium-term outlook remains subject to uncertainty in external markets. In 2011, the National Assembly revised and approved the general tax law introducing public finance to a transparent, turnover based presumptive tax regime for businesses with a turnover below the Value-Added Tax (VAT) registration threshold. In effect, this law eliminated minimum business tax. Finally, the implementation of the 'one-stop' service (as stipulated on the enterprise law and the new investment promotion law) commenced in October 2011.
Lao PDR Economic Monitor, April 2008(World Bank, Vientiane, 2008-04) World BankLao PDR's economic outlook remains favorable, with continued strong growth. Gross domestic product (GDP) growth remained at above 7 percent in 2007. Output expanded in mining, newly emerging processing industries, agriculture, and new construction of hydropower projects, tourism and other services. Non-resource sectors contributed over 5 percent to this growth, and the resource sector around 2.5 percent. As Lao PDR is surrounded by some of the fastest growing economies in the world, it has benefited from increased demands for its products and large FDI inflows from neighboring countries, such as China, Vietnam and Thailand. The macroeconomic situation remained fairly stable, but is at risk of rising inflation. After falling to a record low level of 4.5 percent in 2007, overall inflation climbed to 6.4 percent in February 2008. High fuel prices pushed up the costs of transportation for individuals and households, construction (including imported raw materials and other chemical related products), land clearing and agricultural farming (including processing materials). The kip nominal exchange rates appreciated almost by 9 percent against US$ and was steady against the Thai baht during the last six to months from Oct 2007 to Mar 2008. It reports on recent economic performance (Part I), progress in the implementation of the Government's policy reform agenda (Part II), and donor activities in the relevant reform areas (Part III).
Lao PDR Economic Monitor, November 2007(World Bank, Vientiane, 2007-11) World BankThe information presented in the Lao Economic Monitor covers economic developments that have occurred in Lao PDR in the last six months (between May and October 2007). It reports on recent economic performance (Part I), progress in the implementation of the Government's policy reform agenda (Part II), and donor activities in the relevant reform areas (Part III). The report points out that Lao PDR macroeconomic performance continues to be strong, and the impact of resource sector is increasing. Real GDP growth continued to be robust at 7.6 percent in 2006 and is expected to remain above 7 percent in 2007. Manufacturing and other non-resource sectors continued to grow moderately, contributing around 5 percentage points of the above growth. However, other significant part of economic growth was contributed by the resource sectors, especially by the expansion of copper extraction and construction of large hydropower projects.