Logo of Phnom Penh Post newspaper Phnom Penh Post - Growth in Laos expected to remain resilient despite economic stresses

Growth in Laos expected to remain resilient despite economic stresses

Content image - Phnom Penh Post
The entrance of Houay Ho Hydropower Plant is seen in Sanamxai, Attapeu province. Last year’s prolonged dry spell may affect agricultural production and low reservoir levels could cause cuts in Laos’ electricity generation. AFP

Growth in Laos expected to remain resilient despite economic stresses

A new set of challenges is likely to affect Laos’ economy this year, mainly the long dry season, the coronavirus outbreak and the Sino-US trade war.

Last year’s prolonged dry spell may affect agricultural production and low reservoir levels could cause cuts in electricity generation, a National Institute for Economic Research report said.

Meanwhile, the continuing Covid-19 outbreak in China may affect the region’s service sector, including in Laos.

The Chinese government has banned its tour companies from travelling outside the country. This means that in the first two months of this year, Laos could lose earnings of about $20-25 million from cutbacks in the tourist trade.

This figure is likely to increase if tourists from other countries stop coming to Laos because of concerns about the health situation in the region.

Meanwhile, trade between Laos and other countries is fluctuating amid a slowdown in the global economy and the region due to the trade war and conflict between the US and Iran.

These issues are taking a toll on the export of Lao goods such as garments, coffee and electronic goods.

However, despite these setbacks, the economy looks set to enjoy stable growth of at least six per cent, possibly 6.3-6.4 per cent, due to increased electricity production, notably from the Xayaboury hydropower plant, which started commercial operation in December.

Investment from domestic credit is also expected to see stable growth, especially in small and medium-sized enterprises, hotels, restaurants, trading, agriculture and retail and wholesale businesses. The construction and agricultural sectors will also provide a larger contribution if there is no serious impact from natural disasters.

To ensure economic growth remains stable, the government should pay more attention to acting on important advice, such as actively seeking solutions to economic issues and obstacles to development.

Sectors with strong growth potential such as agriculture and tourism should be developed so Laos can benefit from regional and international integration by increasing revenue in these fields.

It is especially important to improve standards of education so that the workforce is more highly skilled, knowledgeable and capable, and that value chain production is enhanced using advanced technology.

Also of importance is a stronger response to climate change and natural disasters, which are likely to affect the economy more and more in the future, while officials should closely monitor and promptly respond to disease outbreaks.

VIENTIANE TIMES/ASIA NEWS NETWORK

MOST VIEWED

  • Phnom Penh placed in two-week lockdown

    The government has decided to place Phnom Penh in lockdown for two weeks, effective April 14 midnight through April 28, as Cambodia continues to grapple with the ongoing community outbreak of Covid-19, which has seen no sign of subsiding. According to a directive signed by Prime Minister

  • Cambodia on the verge of national tragedy, WHO warns

    The World Health Organisation (WHO) in Cambodia warned that the country had reached another critical point amid a sudden, huge surge in community transmission cases and deaths. “We stand on the brink of a national tragedy because of Covid-19. Despite our best efforts, we are

  • Hun Sen: Stay where you are, or else

    Prime Minister Hun Sen warned that the two-week lockdown of Phnom Penh and adjacent Kandal provincial town Takmao could be extended if people are not cooperative by staying home. “Now let me make this clear: stay in your home, village, and district and remain where

  • Vaccination open to foreigners in Cambodia

    The Ministry of Health on April 8 issued an announcement on Covid-19 vaccination for foreigners residing and working in Cambodia, directing the Ministry of Labour and Vocational Training and local authorities to register them. Health minister Mam Bun Heng, who is also head of the inter-ministerial

  • Ministry names types of business permitted amid lockdown

    The Ministry of Labour and Vocational Training singled out 11 types of business that are permitted to operate during the lockdown of Phnom Penh and Takmao town, which run through April 28. Those include (1) food-processing enterprises and slaughterhouses; (2) providers of public services such as firefighting, utility and

  • Culture ministry: Take Tuol Sleng photos down, or else

    The Ministry of Culture and Fine Arts has told Irish photographer Matt Loughrey to take down the photos of Khmer Rouge victims at Tuol Sleng Genocidal Museum which he allegedly colourised and altered to show them smiling. The ministry said Loughrey's work is unacceptable, affecting