Lao People’s Democratic Republic
Bangkok (UN Information Services) – Economic growth in the Lao People Democratic Republic (PDR) fell in 2007 to seven per cent from 8.3 per cent in 2006, but remained above the average for South East Asia, according to the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP).
In its Economic and Social Survey of Asia and the Pacific, ESCAP said exports rose 13 per cent year-on-year over the first nine months of 2006-2007 led by minerals and hydropower, garments, wood products, coffee, agricultural produce and cattle meat.
“While Thailand remains the main market for Lao PDR products, exports to China and Viet Nam are expanding rapidly,” ESCAP said. It added that between 2001 and 2007 China became the largest source of investment in Laos followed by Thailand.
ESCAP said that for the fiscal year 2006-07, the Committee for Planning and Investment approved 45 Chinese projects worth US$462 million in hydropower, mining, rubber plantations, and telecommunications, construction materials, hotels and restaurants.
Viet Nam, now the third largest source of funds into Lao PDR, has proposed to invest US$1.7 billion in oil exploration and in a hydroelectricity plant – set to be the largest in the country.
Tourism, with 1.3 million arrivals over the first ten months of 2007, was also a major foreign exchange contributor.
But ESCAP warned of the risk of rising inflation by way of higher fuel prices pushing up fertilizer costs and in turn the price of rice and other foodstuffs during 2008. Inflation had eased to 4.6 per cent in 2007 from 6.8 per cent the year earlier. But fuel prices rose by 30 per cent at the end of November last year.
ESCAP also noted another major challenge for the Lao PDR central bank would be to manage the money supply due to a large increase in international reserves that had risen to US$485 million in late 2007 from US$290 million in the same period in 2006.
Further information on the Survey can be found at:
For more information, please contact:
Hak-Fan Lau, UN Information Services, ESCAP
Tel.: +66-2-288-1866, Mob.: +66-84700-1147
Ari Gaitanis, UN Information Services, ESCAP
Tel.: +66-2-288-1862, Fax: +66-2-288-1052