GDP expected to grow by 7.6 percent this fiscal year

The gross domestic product (GDP) for the fiscal year October 2006-October 2007 is expected to grow by 7.6 percent over the remaining months.

According to information from the Committee for Planning and Investment, the agriculture and forestry industries are expected to increase by 2.4 percent, accounting for 40.7 percent of the GDP. The industrial sector should grow by 15.2 percent, constituting 33.3 percent of the GDP, while the service sector should increase by 7 percent, accounting for 26 percent of the GDP.

The national socio-economic development process for the first six months of the fiscal year has continued to move steadily.

This is a result of the combined efforts of the government, concerned sectors and local-level government. The macro-economy grew steadily, and income and expenditure balanced well compared to the same period in the last fiscal year.

The annual average income per capita is expected to reach 6.58 million kip or US$665. During the first six months, the inflation rate was stable, with the average rate of inflation sitting at 4.4 percent, a decrease from 8.4 percent during the same period last fiscal year. The annual inflation rate is expected to reach 5.5 percent.

The kip is stronger against the US dollar, which has weakened, and the macro-economy has remained stable. Lao people have gained confidence in the currency and as a result kip bank deposits have risen.

During these two quarters, the overall revenue collection for the state budget is expected to reach more than 2,703 billion kip or 48.88 percent of the annual budget plan.

Expenditure reached more than 2,958 billion kip or 37.39 percent of the annual plan, covering state administration such as staff salaries, consultants, technical staff and investment projects.

Annual exports are expected to reach US$652.8 million, and US$446.6 million or 68.41 percent of the annual expected export figure was made in the first six months. This is an increase of 22.43 percent from the same time last fiscal year. The export sector is mainly composed of mining exports, which account for 60 percent of the total export figure.

Annual imports are expected to reach more than US$977 million. In the first six months US$349 million or 35.77 percent of the annual expected import figure was reached.

The energy and mining sectors are expected to grow by 18.89 percent - the mining sector alone is expected to grow by 23.8 percent.

During the first six months, the energy and mining sectors increased by 29.63 percent from the last fiscal year. The electricity sector decreased by 4.3 percent due to the limited availability of water, but the mining sector increased by 37.62 percent from last year.

The National Assembly approved 2,550 state investment projects this fiscal year totalling 3,353 billion kip, of which 517 billion kip is domestic capital, while the rest is foreign capital.

Over the first six months, 2,232 projects have been implemented with more than 808 billion kip or 24.11 percent of the annual budget plan outlaid. Of these, 173 projects are complete.

During these two quarters, the government issued business licences for 122 projects using US$441 million of both domestic and foreign private investment. This totals 88.2 percent of the annual plan for private investment, of which US$56 million or 12.7 percent was domestic investment.

This fiscal year, the government has set a target to yield 2.66 million tonnes of rice, which is 4 percent above the figure in the annual plan. Over the past six months, the government has taken measures to prevent bird flu outbreaks and the disease was controlled, but more than 300,000 poultry and more than 500,000 eggs were destroyed.

By Souksakhone Vaenkeo
(Latest Update May 17, 2007)