Lao Economy Shows Moderate Recovery Driven by Tourism, Transport, and Logistics
ADB projects 4% GDP growth for Lao PDR in 2024 and 2025 amidst ongoing challenges
The economy of the Lao PDR is experiencing a moderate recovery, backed by tourism, transport, and logistics, according to the Asian Development Bank (ADB).
ADB projects GDP growth in 2024 and 2025 at 4%, as highlighted in the report of the Executive Macroeconomic Working Group Consultation Meeting 2024 held on June 5.
“Currency depreciation and domestic inflation remain high. Increasing reliance on the domestic market for financing high external debt maturities squeezes the domestic finance market,” said Ms. Sonomi Tanaka, Country Director of the Lao PDR Resident Mission at the ADB.
Ms. Tanaka noted that continuing macroeconomic imbalances pose risks to price stability and food security, creating hardship for people across the country. Prolonged tight fiscal conditions have already had significant negative impacts on investing in future generations, including education, health, human capital development, and investment in adaptation and preparedness for worsening climate and disaster impacts.
The meeting was attended by Vice Minister of Planning and Investment, Ms. Phonevanh Outhavong, Mr. Alex Kremer, Country Manager of the World Bank, and relevant officials. The aim was to discuss the implementation of the national socio-economic development plan for the next six months of 2024, the state budget plan, and currency issues. Discussions also focused on revising the Lao PDR's investment promotion law to align with the current investment situation, aiming to address difficulties and challenges in a timely manner.
“This meeting is of great importance to the implementation of the 9th Five-year National Socio-Economic Development Plan and the creation of the 10th 5-year development plan, especially the management and adjustment of the macro-economy to be more effective and contribute to the solution of economic and financial difficulties such as the exchange rate and weak kip,” said Ms. Phonevanh.
During this year’s Round Table Meeting in February, Ms. Phonevanh emphasized the importance of acknowledging that business as usual would no longer work, and that more drastic reforms for improving economic governance would be crucial.
ADB projects GDP growth in 2024 and 2025 at 4%, as highlighted in the report of the Executive Macroeconomic Working Group Consultation Meeting 2024 held on June 5.
“Currency depreciation and domestic inflation remain high. Increasing reliance on the domestic market for financing high external debt maturities squeezes the domestic finance market,” said Ms. Sonomi Tanaka, Country Director of the Lao PDR Resident Mission at the ADB.
Ms. Tanaka noted that continuing macroeconomic imbalances pose risks to price stability and food security, creating hardship for people across the country. Prolonged tight fiscal conditions have already had significant negative impacts on investing in future generations, including education, health, human capital development, and investment in adaptation and preparedness for worsening climate and disaster impacts.
The meeting was attended by Vice Minister of Planning and Investment, Ms. Phonevanh Outhavong, Mr. Alex Kremer, Country Manager of the World Bank, and relevant officials. The aim was to discuss the implementation of the national socio-economic development plan for the next six months of 2024, the state budget plan, and currency issues. Discussions also focused on revising the Lao PDR's investment promotion law to align with the current investment situation, aiming to address difficulties and challenges in a timely manner.
“This meeting is of great importance to the implementation of the 9th Five-year National Socio-Economic Development Plan and the creation of the 10th 5-year development plan, especially the management and adjustment of the macro-economy to be more effective and contribute to the solution of economic and financial difficulties such as the exchange rate and weak kip,” said Ms. Phonevanh.
During this year’s Round Table Meeting in February, Ms. Phonevanh emphasized the importance of acknowledging that business as usual would no longer work, and that more drastic reforms for improving economic governance would be crucial.
Translation:
Translated by AI